For refunds for an order paid for using a different currency than the ones available on your PayPal account, you have two options:
- Adding all the currencies covered in your store to your PayPal account to avoid rejections of cross-currency transactions and any refund issues.
To do so, go to paypal.com > Login > Settings > My Money > Currencies management > Add a currency
- Contacting PayPal and asking them to activate the cross-currency refund option. (Via the "Contact us" tab on paypal.com).