Examkin

Question

Difficulty: MediumMeans of Payment in Foreign Trade

An importer in Lagos needs to make an urgent financial remittance to a foreign supplier in Tokyo. To achieve the fastest direct electronic transfer of funds between commercial banks into the supplier's account, which means of payment should the importer request?

  1. Telegraphic TransferAnswer
  2. B
    Bill of Lading
  3. C
    Letter of Credit
  4. D
    Consular Invoice

Answer

Telegraphic Transfer is the correct payment instrument for rapid electronic interbank funds settlement in foreign trade.
Telegraphic Transfer (T/T), often conducted via interbank communication networks like SWIFT, allows banks to transfer funds electronically and almost instantaneously across international boundaries, meeting the importer's need for speed.

Step-by-Step Solution

1
Identify the primary requirement in the scenario
The requirement is an urgent, direct electronic remittance of money across international borders from importer to exporter.
The scenario emphasizes speed and direct electronic interbank transfer.
2
Evaluate the payment mechanisms against foreign trade shipping documents
Telegraphic Transfer provides direct electronic interbank wiring, whereas options like Bill of Lading and Consular Invoice are shipping/customs documentation.
Shipping documents convey title or declare goods value, while payment instruments move financial capital.

Key Concept

Electronic funds transfer mechanisms in foreign trade
Rate this question

Topics

Means of Payment in Foreign Trade

More questions from this topic