THE USE OF TRADE FINANCE INSTRUMENTS TO MITIGATE RISKS IN FOREIGN TRADE

Abstract

This paper analyzes the main risks associated with foreign trade operations and highlights the role of trade finance instruments in mitigating these risks. Particular attention is given to instruments such as letters of credit, bank guarantees, factoring, forfeiting, and export credit insurance. The study shows that these tools enhance transaction security, reduce counterparty and payment risks, and contribute to the stability of foreign economic activity. It is concluded that expanding the use of trade finance instruments is essential for strengthening foreign economic security and improving the resilience of trade operations under global uncertainty.