Why does anyone demand foreign currency?

Question

Quizplus · Accepted Answer

Foreign currency is demanded for all three reasons mentioned - international trade in goods and services, international trade in financial assets, and purchases of physical assets overseas. For instance, when a business imports products from another country, they need to purchase that country's currency to pay for those products. Similarly, if an investor wants to invest in a foreign stock or bond, they need to buy that country's currency first. Lastly, if someone wants to purchase a property or asset overseas, they need to have the currency of that country.

Why Does Anyone Demand Foreign Currency