A system for exchanging currencies is necessary for international trade because different countries have their own currencies with varying values. The exchange rate determines the value of one currency in terms of another currency. When two countries engage in trade, they need to convert their respective currencies into a common currency to facilitate the transaction. Without a currency exchange system, it would be difficult to negotiate prices, calculate costs, and settle payments between countries using different currencies. Additionally, fluctuations in exchange rates can impact the profitability of international trade, making it crucial to have a system in place for currency conversion.
