PayPal requires you to have the currency set up to receive the payment.
To set the options for blocking this type of payment:
Log in to your PayPal account at https://www.paypal.com.
The My Account Overview page opens.
Click the Profile subtab.
The Profile Summary page opens.
In the Selling Preferences column, click the Payment Receiving Preferences link.
The Payment Receiving Preferences page opens.
Scroll down the page to the Block payments sent to me in a currency I do not hold section as shown below.
Select one of the following options:
Yes – Accept the payment regardless of the currency in which the payment is made.
No, accept them and convert them to U.S. Dollars – Accept the payment, but automatically converts to U.S. Dollars.
Ask Me – Choose whether to accept or deny payment in a currency you do not currently hold on a transaction-by-transaction basis. If you accept the payment, it becomes a completed transaction. If you deny a particular payment, the sender of the payment is notified that the payment has been denied and is credited with the payment amount. PayPal does not charge fees for denied payments.
Scroll to the bottom of the page and click the Save button.