Question

How important is foreign exchange to one’s country?

Answer 1

1. During any Crisis Foreign exchange reserves come to the rescue of any country. It absorbs the distress related to such a crisis.
2. It increases the confidence in the monetary and exchange rate policies of the government.
3. Foreign exchange reserves are the foreign currencies held by the Country’s Central Bank. They are also called Foreign currency reserves (or) Foreign reserves. They manage their currencies.

Thus foreign exchange is important to any country.