A "Reverse Repo" is a financial transaction where a central bank, like the Federal Reserve, sells securities to financial institutions with an agreement to repurchase them later at a higher price. This process helps manage the money supply and control short-term interest rates in the economy. In a reverse repo, the financial institution temporarily holds the securities and earns interest on the cash it provides. This tool is often used to absorb excess liquidity in the banking system, ensuring that banks have the right amount of funds available for lending and other activities.