Total Letters of Credit (LCs) payments, between January and December last year, amounted to $1.31 billion, latest data released by the Central Bank of Nigeria (CBN) has shown. The amount is N56.67 million or 4.15 per cent less than the N1.36 billion that went into LC payments in 2022, according to data released by the apex bank. A breakdown of data on international payments for last year released by the regulator over the weekend, indicates that LC payments amounted to $107.78 million in January 2023; $171.95 million in February; $269.49 million in March; $152.52 million in April; $60.29 million in May; $79.18 million in June; $71.14 million in July; $82.24 million in August; $71.69 million in September; $71.99 million in October; $49.17 million in November and $121.14 million in December. A Letter of Credit (LC), also known as a documentary credit, is a mode of payment used for the importation of visible goods. Typically, it is a letter from a bank guaranteeing that a buyer's(importer) payment to a seller (exporter) will be received on time and for the correct amount, upon presentation of stipulated documents that conform to the terms and conditions of the documentary credit. Analysts attribute the decline in LC payments in 2023, when compared with the amount recorded for the preceding year, to the significant drop in the country's external reserves last year.
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