Question

QUESTION 7 Why is it that surrencies become an important issue in international financial transactions?

Answer 1

all international financial transactions involve the exchange of foreign currency, if they are foreign, meaning that the countries use different currencies.
For example, if France and Germany decide to trade, while in two different countries, they will not need to exchange money first because they both use the euro. Therefore, currency exchange should take place prior to foreign exchange transactions involving different countries in different currencies.

Given that there are two types of international financial transactions - one in which goods and services are traded and one in which people trade in goods - it may be that a country not involved in the sale of goods and services continues to be involved in foreign exchange transactions.