How do repurchase agreements (repos) differ from commercial paper in terms of their use in the money market?

Repurchase agreements, or repos, are short-term loans where one party sells securities to another with an agreement to buy them back later, usually the next day. This is a way for banks and financial institutions to manage their cash needs quickly. In contrast, commercial paper is a type of unsecured debt that companies issue to raise funds for short-term expenses, like paying suppliers or managing payroll. While repos are mainly used by financial institutions to secure short-term funding, commercial paper is used by businesses to finance their operations. For example, a company might issue commercial paper to pay for materials to produce goods, while a bank might use a repo to ensure it has enough cash available for its daily operations.