General Knowledge - Basic General Knowledge - Discussion

A letter of credit takes the form of an authorization of payment sent by the importer's bank to the exporter's bank and is cashed like A CHEQUE.

How is gold market fluctuation is related to share market?

Letter of Credit L/c also known as Documentary Credit is a widely used term to make payment secure in domestic and international trade. The document is issued by a financial organization at the buyer request. Buyer also provide the necessary instructions in preparing the document.

The International Chamber of Commerce (ICC) in the Uniform Custom and Practice for Documentary Credit (UCPDC) defines L/C as:

An arrangement, however named or described, whereby a bank (the Issuing bank) acting at the request and on the instructions of a customer (the Applicant) or on its own behalf :

Is to make a payment to or to the order third party (the beneficiary) or is to accept bills of exchange (drafts) drawn by the beneficiary.

Authorised another bank to effect such payments or to accept and pay such bills of exchange (draft).

Authorised another bank to negotiate against stipulated documents provided that the terms are complied with.

A key principle underlying letter of credit (L/C) is that banks deal only in documents and not in goods. The decision to pay under a letter of credit will be based entirely on whether the documents presented to the bank appear on their face to be in accordance with the terms and conditions of the letter of credit.

Me also having doubt how gold market fluctuation relates to share market?

What is inflation?

Inflation is nothing but it is a general increase in prices.

It's called "LOC" Letter Of Credit.

It is a agreement between seller and buyer.

It's international terminology in business transaction.

I can't understand. Please, can anyone explain it clearly?