What is a correspondent bank primarily used for?

A correspondent bank plays a crucial role especially in the realm of international finance. Its primary function is to facilitate international payments and transactions between banks located in different countries. When a bank does not have a direct relationship or presence in a foreign country, it can rely on a correspondent bank to handle transactions, enabling the transfer of funds across borders. This service is essential for conducting international trade and helping businesses engage in foreign markets efficiently.

In contrast, the other options present functions that do not align with the primary role of a correspondent bank. Local payments are typically managed by domestic banks, investment services are generally offered by investment firms or banks with specific financial services divisions, and issuing credit cards is a function carried out by banks that focus on consumer banking rather than the specialized services of correspondent banks. Thus, the role of correspondent banks is centered on enhancing global banking connectivity, making the facilitation of international payments its main objective.