Letters of Credit

A Letter of Credit [L/C] is a great business tool for importers to protect their own, as well as their supplier's interests. An L/C is essentially a bank guarantee for payment of supplied (imported) goods. It is often at the request of the overseas supplier that payment for goods are made in advance to protect them from default on payments.

While NZForex doesn't issue L/Cs, we can help you save money on the foreign exchange transfer involved.

A simplified L/C process would take place as follows:

  1. Buyer and seller agree terms of trade (price, specification, shipping etc.).
  2. Buyer applies for L/C from issuing bank.
  3. Issuing bank sends L/C to supplier's bank.
  4. Supplier sends goods to importer.
  5. Assuming agreed terms are met, issuing bank pays supplier.

Now here's where NZForex comes in...

Ordinarily, the issuing bank would debit the importer's account in their local currency, and convert it at the bank's chosen rate to pay the supplier in the foreign currency. By advising their bank not to proceed with the debit of their bank account, an importer can have NZForex make the conversion. Payment would then be made to the issuing bank in the foreign currency. NZForex does not charge extra for this service, and savings can be substantial. Payments for L/Cs still attract the same competitive NZForex rates.

Please contact us for more details or fill in the form below.

Currency Converter


Market Rate For information purposes only. Terms of Use
For details, see My FX Dashboard

For NZForex’s customer rate
Log In or Register Now
Rate: 0.7174
=
Rate: 1.3939
=

Open an account

Send money overseas at better rates than the banks.


Subscribe to commentary



RSS Follow Facebook

Set rate alerts

/
 
Choose currency pair and enter the exchange rate. An alert will be triggered when the exchange rate is reached and an email will be sent to you. You can unsubscribe any time and your email address is safe – see our Privacy Policy.

NOTE: These rates are for informational purposes only

© 2014 Copyright. This service is provided by NZForex Limited (CN: 2514293). NZForex is registered as a financial service provider under the Financial Service Providers (Registration and Dispute Resolution) Act 2008.
The information on this website does not take into account the investment objectives, financial situation or needs of any particular person. NZForex makes no recommendations as to the merits of any financial product referred to in this website.
Please read our Product Information document for a detailed explanation of the services we provide.
 
Ofx.com