extended letter of credit的意思|示意

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Extended letter of credit is a type of payment instrument used in international trade finance. It is issued by an issuing bank on behalf of an importer. The exporter presents the letter of credit and other documents as evidence of his performance of the contract, and the issuing bank pays the exporter after confirming the documents.

The extended letter of credit is also known as revolving letter of credit. It is different from the traditional letter of credit due to its long time validity, so that importers and exporters can often use it to settle their accounts in international trade.

Extended letter of credit has the characteristics of large amount, high security and wide application. Generally, the amount of an extended letter of credit is based on the annual sales of the exporter. In addition, the letter of credit is guaranteed by a bank, which is not easy to be refused. The exporter can use this document to purchase raw materials, so as to reduce the financial risk of production.

To sum up, extended letter of credit is a widely used payment instrument in international trade. It has the advantages of large amount, high security and wide application, which can effectively protect the interests of exporters and importers.