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Should firms use a single functional currency to measure international operations?

Should firms use a single functional currency to measure international operations?

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Answer #1

Yes, Firms should use the single functional currency to measure international operations. When business uses one primary currency in all the operations, it is called single currency. We can see the benefits of using single currency:

  1. There will not be great fluctuations in currency so currency will be stable.
  2. Transaction cost of changing one currency into another currency is reduced.
  3. Single currency business reduces the cost so companies get economies of scale and they are able to cope up with the competitors.
  4. Single currency attracts the investors and investment increases in the country.
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