Why does trade between countries require a process for exchanging different currencies?
Trade between countries requires a process for exchanging different currencies because each country has its own currency with a different value and exchange rate. When goods and services are exchanged between countries, they need to be paid for in the local currency of the exporting country.
In order to facilitate international trade, a system of currency exchange is necessary to convert one currency into another at an agreed upon exchange rate. This allows businesses and individuals to buy and sell goods and services across borders without having to worry about the complexities of dealing with multiple currencies.
Additionally, fluctuations in currency values can impact the cost of goods and services, and having a process in place for exchanging currencies helps to mitigate the risks associated with these fluctuations. Overall, a process for exchanging different currencies is essential for the smooth functioning of international trade.