Why does anyone demand foreign currency?

Question

Quizplus · Accepted Answer

Foreign currency is demanded for all three reasons, i.e., international trade in goods and services, international trade in financial assets, and purchases of physical assets overseas. In international trade, companies need to pay for their imports in a foreign currency, while foreign investors may buy financial assets in a foreign currency. Additionally, individuals or companies may need foreign currency to buy physical assets like real estate overseas.

Why Does Anyone Demand Foreign Currency