A time draft

Question

A time draft

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A time draft is a written order instructing the importer or his agent to make payment of the specified amount on a certain date. It is also known as a usance draft or a sight draft with a term of payment at a future date. This type of payment instrument is commonly used in international trade transactions. The exporter may offer the buyer an option to pay by a time draft, which is essentially a promise to pay at a later date. The time draft may be discounted with a bank and turned into a banker's acceptance, which can then be sold on the secondary market.

A Time Draft