Meaning of the word "Documentary Credit" in English
What does "Documentary Credit" mean in English? Explore the meaning, pronunciation, and specific usage of this word with Lingoland.
Documentary Credit
US /ˌdɑkjəˈmɛntəri ˈkrɛdɪt/
UK /ˌdɒkjʊˈmɛntəri ˈkrɛdɪt/
Noun
a financial instrument issued by a bank on behalf of a buyer (importer) guaranteeing payment to a seller (exporter) upon presentation of specified documents, ensuring both parties fulfill their obligations in international trade
Example:
•
The importer secured a Documentary Credit to assure the exporter of payment for the goods.
•
International trade often relies on a Documentary Credit to mitigate risks for both buyers and sellers.
Related Word: