Correct Answer: Facilitating international trade

Solution : The correct answer is a) Facilitating international trade

The primary function of the foreign exchange market is to facilitate the exchange of currencies between different countries. It provides a platform for individuals, businesses, and financial institutions to buy and sell currencies, allowing for the conversion of one currency into another. This enables participants in the market to engage in international trade and conduct cross-border transactions. The foreign exchange market plays a crucial role in determining exchange rates, which impact the cost of imports and exports, and ultimately influence a country's international trade flows. While the foreign exchange market can indirectly influence interest rates and inflation rates, its main purpose is to support international trade and currency exchange.