What is a buy-back agreement? The repurchase agreement is a form of short-term loan to government securities dealers. Individuals or small investors cannot participate directly in the money market. However, it may participate in investment companies (brokerage firms) through the Mutual Monetary Fund (MMMF) or money funds. MMFMs or investment funds act as financial intermediaries that facilitate the sale of shares or holdings to retail investors and assign them to money market instruments. For some, these money market instruments are not yet known. The money market is a different market than the bond market or the stock market. Companies that participate in hedging efforts. Any customer who is the subject of an insurance policy bears the damage by replacing him if the client is concerned or exposed to risks as promised. This means that the insurance activity is an activity that bears the financing risks between the policy payable and the debt it receives. The size of the directive has an impact on the right to be received.
Repo operations target agencies with surplus funds, including government banks and private banks, non-bank financial institutions (insurance funds and pension funds) and other companies with surplus funds. The central bank acts as an intermediary for the distribution of government bonds (securities or SBI). The central bank controls the SBI in order to influence the amount of money in circulation in order to control the rate of inflation. This is the central bank`s main task. c) Avoid the appearance of unutilized money (iddle money); That is, money stored and not used for productive activities, for example. B in a safe (safe). Third, in the repurchase agreement, the seller receives cash for the sale of the guarantee, but keeps it in a deposit account for the buyer. In other words, the money market has different characteristics than the bond market, particularly in terms of tenor (schedule). The life of the loan is usually longer than one year and some even reach a dozen to decades. What is a buy-back agreement? This is usually something that is considered a safe investment because the security in question serves as a guarantee. That is why most agreements are U.S. Treasury bonds.
The Treasury Bill (SPN) is a money market instrument issued by the government with different tenors of 3 months, 6 months and 1 year. The money market allows Indonesia, as a central bank, to be associated with the control of the money supply in circulation. Problem two. The following types of securities are traded on the capital market, except …. It holds the securities and ensures that the trader receives cash at the beginning of the agreement and that the buyer transfers funds to the merchant and returns the securities to maturity.