Letters of Credit, the Lowest in Over 5 Years

The total sum of letters of credit(L/C) issued dropped to the lowest level in five years and eight months stemming from the sluggish economy and credit crunch. The Bank of Korea (BOK) announced on October 25 that the total sum of L/Cs issued last September decreased by 19.6% to 4.5 billion dollars, which is the lowest since January, 1993 which posted 4.0 billion dollars.
The sum of L/Cs tended to increase since 1993 but dropped since March, 1998 when it stood at 6.1 billion dollars. This is bad sign for the Korean economy because L/Cs totals are a forecasting index to predict exports. A source in the financial sector said, 'It is not certain that Korean exports can increase because the sum of L/C continued to decrease in spite of the new triple-low phenomenon we are experiencing( low interest, currency, petroleum) and the government's policy for boosting exports.'