A draft is issued by the exporter's bank, ordering the importer's bank to pay for the merchandise and thus guaranteeing payment once it is accepted by the importer's bank.

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A draft, also known as a bill of exchange, is a type of payment instrument used in international trade. It is issued by the exporter's bank and contains an order for the importer's bank to pay for the merchandise. Once accepted by the importer's bank, the draft becomes a legally binding obligation to pay and guarantees payment to the exporter.

A Draft Is Issued by the Exporter's Bank, Ordering the Importer's