Business Studies, asked by AnirudhSinghrawat941, 4 months ago

What is the letter of credit? Why does an exporter need this document

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Answered by aditikanwadkar

Answer:

A letter of credit is issued by the bank of an importer guaranteeing to honour a draft of a certain amount drawn on it by the exporter. It is an important document because, in international transactions, there is always a risk of the importer defaulting on payment once the goods are received.

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