Forward repo and reverse repo are two relative concepts, and the difference between them mainly lies in the direction of the transaction, the counterparty, the purpose of the transaction, and the nature of the transaction.
1.Transaction direction: positive repurchase is selling, reverse repurchase is **. Forward repurchase is a transaction behavior in which the central bank sells price** to primary dealers and agrees to buy back the price** on a specific date in the future; Reverse repo is a transaction in which the People's Bank of China purchases valuable ** from primary dealers and agrees to sell valuable ** to primary dealers at a specific date in the future.
2.Counterparty: The counterparty of the repurchase is the primary dealer, and the counterparty of the reverse repurchase is the central bank.
3.Purpose of the transaction: The purpose of the repurchase is to withdraw excess liquidity in the market and adjust the capital side of the market; The purpose of reverse repo is to inject liquidity into the market and increase the supply of market funds.
4.Nature of transaction: positive repurchase is a short-term financing behavior, and reverse repurchase is a short-term investment behavior. In general, positive repo and reverse repo are both means for the central bank to regulate market liquidity, and the two complement each other and jointly maintain the stability of the money market.