A contract which is entered into between a seller and buyer for the temporary sale of securities, such as treasury bills. Under this contract, the seller agrees to repurchase the same securities (or their equivalent) at a specified date and usually for a fairly higher price, depending on prevailing interest rates and the lapse of time between the initial sale and repurchase.

The rate used in repurchase agreement is known as the repo rate.

It is also called a repo or buyback.