Do all international financial transactions necessarily involve exchanging one nation’s distinct

Explanation
International transactions involve the sale and purchase of goods and services across nations. When people in one country buy goods from some other foreign country, they need to get make payments in the respective currency of the foreign country from which the goods or the services have been purchased. Similarly, when people in a foreign country buy the goods from a given country, the given foreign people would be required to make payments in the respective currency of the given country. As such, people are required to exchange currencies for engaging themselves in international transactions. The only case where the exchange of currencies is not required is when goods and services are traded across nations for goods and services. However, such barter exchange is rarely found among countries.

A country must not necessarily import or export goods and services in order to get itself engaged in international financial transactions. International financial transactions also take place when a country buys some assets in a foreign country or a foreign country buys some assets in the domestic country.

Verified Answer
Yes. This is because each country selling its goods and services to the rest of the world accepts payments in its domestic currency only. This is not required in barter exchange where goods are traded for goods but such transactions are difficult and rarely witnessed.

Even if a country does not import and export goods, it does require to exchange currencies.