A standby letter of credit can provide payment to the beneficiary even if the goods are not shipped, as it serves as a backup guarantee in case of default by the buyer.

The expiry date in a letter of credit can refer to all these aspects; it marks the deadline for both the delivery of goods and the presentation of documents.

A sales contract is often required when applying for a letter of credit to ensure that the bank has a clear understanding of the transaction and the obligations involved.

A letter of credit backed by two banks: the issuing bank and a confirming bank.

A standby letter of credit primarily mitigates the risk of non-payment by guaranteeing that the seller will receive payment even if the buyer fails to fulfill their payment obligations.

The main difference is that letters of credit require the presentation of specific documents to receive payment, whereas bank guarantees simply provide a promise of payment upon default.

To prevent phantom shipping, companies use strict systems for verifying and tracking shipments, ensuring they align with payment claims and detecting inconsistencies.

Phantom shipments refer to cases where an order is created, payment is collected, but the goods are never shipped.

Monetary policy involves the central bank's actions to control the money supply and interest rates, which influences inflation and economic growth.

The primary function of a central bank is to manage a country's currency and money supply, which includes issuing currency, controlling inflation, and maintaining financial stability.