What is the drawback for the importer in using a letter of credit?
A)The importer loses control over the process of trading.
B)The system is skewed heavily in favor of the exporter.
C)It may reduce his ability to borrow funds for other purposes.
D)The loan must be repaid even before the merchandise has been solD.

Question

Quizplus · Accepted Answer

Since the letter of credit is a financial liability against the importer,it may reduce the importer's ability to borrow funds for other purposes.

What Is the Drawback for the Importer in Using a Letter