Exchange rate stability refers to a situation where the value of a currency remains relatively constant against other currencies over time. This stability is important for international trade, as it helps businesses and investors make informed decisions without worrying about sudden fluctuations in currency values. A stable exchange rate can encourage foreign investment and promote economic growth. Governments and central banks often implement policies to maintain exchange rate stability, such as adjusting interest rates or intervening in currency markets. Factors like inflation, economic performance, and political stability can also influence exchange rates, making it essential for countries to monitor these elements closely to ensure a stable economic environment.