What is the use of floating IP for a virtual machine in the openstack environment ?

Question

Is the floating IP necessary for a VM ?

Answer 1

As per my knowledge, when a VM is created it gets fixed after connecting to virtual switch. But floating IP is required so that it can be accessed from outside of its local network. If floating IP is not assigned to VM then it can access external network but external network can't reach to this VM.
Please correct me if my understanding is wrong.