Your passport is your internationally accepted identification, so anytime you want to travel/cross a border, to almost any country on Earth, it's a good idea to have it with you. Without your passport, a lot of legal issues can arise. In some countries, they will assume you are there illegally, and you will be deported and/or detained. You are subject to the laws and the legal system of the country you are visiting, so if you are arrested without papers for any reason, they will not know you are a citizen of your home country, and will likely not notify your embassy - which in some cases is your best hope of gaining your freedom.
Losing your passport is at the least inconvenient and expensive to replace, and at worst can lead to your detention.
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