Say that my country with a currency called “X” has an exchange rate of X10/$1 so 10 X = 1 dollar but a burger in the US is equal to $1 while the same burger in my country is equal to 10 X then why does an exchange rate matter if we can still get the equivalent items just in our own currencies?
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Exchange rates are basically a market for money. If I want to purchase something in the EU but don’t have any Euros, I need to go buy some. The price of the Euro is going to depend on supply and demand like any good. Demand (or lack thereof) typically comes because people in other countries want/don’t want to do business in another country.
For some currencies, like the US dollar, demand comes because the dollar is seen as relatively stable – a guy in China and another guy in Ecuador will negotiate a deal in US dollars for the stability of both parties.
Some countries will try to make exchange rates favorable for buyers/sellers in their nation, so they will either take measures to increase/decrease the supply of cash at a given time, or they will set legal limits of how currency can be exchanged (which can lead to black market currency exchanges that are closer to what the actual market demands haha).
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