A type of repo (repurchase agreement) in which the interest rate is changed (floats) in accordance with change in an auction rate, over the term of the transaction. The auction process is managed by a monetary authority on a frequent basis (bi-monthly) as part of the monetary policy review in a given country.

Repo rate = underlying index rate ± spread

Floating rate repos usually depend on monitoring and recording of the movement in floating rate indexes (e.g., overnight index, tom/next index, LIBOR or EURIBOR) or any other alternative benchmark rates, usually over extended periods of time.

Examples of floating rate repos include: OI floating rate repo, tom/next-indexed repos, and term-rate-indexed repos.

Floating rate repos are also known as variable-rate repos.