GENEVA, Nov 12 (Reuters) - The cost of some trade finance deals is more than six times higher than a few months ago as the global financial crisis bites into the sector that keeps commerce moving, the head of the World Trade Organisation (WTO) said on Wednesday.
Director-General Pascal Lamy said some operations that charged a “spread” of 80 basis points, or 0.8 of a percentage point, over bank refinancing rates a few months ago were now charging 500 basis points, or five percentage points.
“That’s the evidence of the imbalance in the market and the tightness, including in liquidity,” he told a briefing after a meeting of trade finance experts to discuss the crisis.
Lamy said the market for trade finance — which funds about 90 percent of the $14 trillion in world trade — was lacking about $25 billion of liquidity. (Reporting by Jonathan Lynn; Editing by Andrew Dobbie)