A letter of credit that provides an exporter with the guarantee of another bank in addition to the importer's bank is called ________.

Question

Quizplus · Accepted Answer

A confirmed letter of credit adds an extra level of security for the exporter as it is guaranteed by both the importer's bank and another bank, usually located in the exporter's country. This means that if the importer's bank defaults or is unable to pay, the exporter still receives payment from the confirming bank.

A Letter of Credit That Provides an Exporter with the Guarantee