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Market View: Asian exporters and the LC conundrum
04 December 2008
Asian exporters have found access to letters of credit considerably harder of late. Trade Finance asks a panel of financiers in the region to assess how severe this problem really is.
letters of credit
According to news reports Asian exporters have seen their
cargo pile up at the docks next to empty ships as they fail to
get the necessary bank guarantees or letters of credit to
ensure their exports reach their intended markets.
Finance approached a panel of specialists to ask
whether these reports are true and if so how severe is the
problem? Similarly, if trade credit is becoming scarce who will
make up the shortfall? Are Asian exporters right to be
regional head of trade finance, Asia Pacific, Deutsche
"Whilst Asia is not immune to the global economic
slowdown, the current environment, and corresponding shortage
of liquidity to support global trade, it has in fact prompted
the increased use of traditional trade instruments, such as
letters of credit assources of funding/financing.
"Corporates with existing credit lines will generally find
no issues getting the funding. However,...
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