What Does Meaning of " Functional Currency"?

Functional currency is the principal (most used) currency used by the entity e.g. a Tea brokerage house in Kenya, whose reporting currency would be Kenya shilling but its Functional currency would be US Dollar, it buys teas in the EATTA Tea Auction in USD and sells it to buyers in USD. 

it is the currency in which the company operates

1. Functional currency refers to the main currency used by a business or unit of a business. It is the monetary unit of account of the principal economic environment in which an economic entity operates.

a Canadian company with the bulk of its operations in the United States would consider the U.S. dollar its functional currency, even if financial figures on its balance sheet and income statement are expressed in terms of Canadian Dollars.