Export L/C Lapse Nine Straight Months,

The amount of incoming export credit has fallen down for the past nine month, generating worries that the export slump might continue in the future.

As a crucial index was established to estimate the export situation for next three to four months, the exports, through the export letters of credit (L/C), have constituted 30-40 percent of the total exports.

The Bank of Korea said yesterday that the export L/C arrivals amounted to 4.68 billion dollars in August, dropped by 9.1 percent from the same period last year (5.15 billion dollars).

The export L/C arrival has shown the declining tendency for nine straight months since it fell down by 8.6 percent year-to-year in December last year. In particular, during the second quarter of this year, the monthly export L/C arrival recorded between 4.57 billion dollars and 4.72 billion dollars, presenting a double-digit decline rate of 10.6-18.5 percent from the same period of last year. Therefore, the recovery of exports is likely to take a considerably long time.

In actuality, since falling down by 2.1 percent in May, the export has dropped for seven straight months until September when it plummeted by 16 percent from the same period of last year. In August, it recorded the decline rate of 20 percent. Moreover, the export L/C arrival dropped by 9.8 percent in August from the previous month.

The 9.11 terrorist attacks on the U.S retarded the recovery of the world economy, which otherwise might make a favorable turn, signaling the gloomy future of the Korea`s exports.

hcs@donga.com