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What is currency and foreign exchange, Why are they so important to international business?

What is currency and foreign exchange, Why are they so important to international business?

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Answer #1

A currency is the medium of exchange that is utilized in a country to buy or sell a commodity or service. Unlike the barter system it is an easier way of payment for the citizens to carry out their exchange.

Foreign exchange is the exchange of such country specific currencies. This medium aids to conduct export and import of goods and services between various countries.

FOREX helps countries to expand their global markets and reach out to other countries creating a wider market for producers to sell and consumers to buy the same. Forex is the value of currencies set if they exchange their goods between eachother. Example 1$= 79 Rupees.

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