Economics • Banking & FinanceMedium
What is the primary operational objective of introducing 'Treps (Tri-Party Repo)' in the Indian money market?
A. To provide long-term foreign exchange hedging facilities to commercial exporters
B. To enable borrowing and lending of funds in a secured manner through a central counterparty✓ Correct Answer
C. To facilitate direct retail investment in government securities without intermediaries
D. To finance infrastructure projects through long-term municipal bonds
💡 Solution & Explanation
TREPS or Tri-Party Repo enables market participants to borrow and lend short-term funds in a secured manner through the Clearing Corporation of India Limited acting as a central counterparty. It enhances liquidity management in the Indian money market by anonymizing transactions and providing collateral management.
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