A repurchase agreement, or “repo”, is a short-term agreement to sell securities with a view to repurchasing them at a slightly higher price.
The one who sells the repo is actually borrowing and the other side is lending, since the lender is credited with an implicit percentage of the difference in prices from initiation to redemption.
Repos and reverse repos are thus used for short-term borrowing and lending, often with maturities ranging from overnight to 48 hours.
The implied interest rate under these agreements is known as the repo rate, analogous to the risk-free overnight rate.