Repurchase is a transaction in which one party takes a certain amount of bonds as collateral, integrates funds and promises to repurchase mortgage bonds in the future. It is also one of the open market operation methods often used by the central bank. The central bank can use the repurchase operation to achieve the effect of withdrawing funds from the market. Compared with the central bank bill, the repurchase will reduce the operating cost, and at the same time, the effect of locking funds will be stronger and the liquidity will be reduced. Judging from the origin of repurchase transactions, repurchase transactions are closely related to the operation of the central bank from the beginning. 19 18 the federal reserve created repurchase transactions to promote the development of bank acceptance bills, but at that time, bank acceptance bills were used as collateral instead of bonds. Therefore, the bond repurchase transaction initiated by the central bank as a repo party is what we call the central bank's repurchase operation. The bond repurchase transaction initiated by the central bank as a reverse repurchase party is the reverse repurchase operation of the central bank. According to international practice, the central bank usually selects some commercial banks, securities companies or trust companies with strong financial strength, good reputation and active trading as counterparties from market members, that is, primary dealers in the open market, and conducts forward and reverse repurchase transactions through bidding. Generally speaking, in order to make its repurchase operation successful, the central bank often gives a repurchase rate slightly higher than the market repurchase rate when bidding in batches, which makes it easier to reach a deal and recover funds smoothly. When the central bank conducts reverse repurchase transactions, the repo rate it gives is often lower than the market repo rate.