External Debt

AAA

DEFINITION of 'External Debt'

The portion of a country's debt that was borrowed from foreign lenders including commercial banks, governments or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made. In order to earn the needed currency, the borowing country may sell and export goods to the lender's country.

INVESTOPEDIA EXPLAINS 'External Debt'

A debt crisis can occur if a country with a weak economy is not able to repay external debt due to the inability to produce and sell goods and make a profitable return. The International Monetary Fund (IMF) is one of the agencies that keep track of the country's external debt.

RELATED TERMS
  1. Export

    A function of international trade whereby goods produced in one ...
  2. International Accounting Standards ...

    An older set of standards stating how particular types of transactions ...
  3. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  4. International Financial Reporting ...

    A set of international accounting standards stating how particular ...
  5. International Currency Exchange ...

    The rate at which two currencies in the market can be exchanged. ...
  6. Global Recession

    An extended period of economic decline around the world. The ...
Related Articles
  1. Forex Fundamentals

    What Causes A Currency Crisis?

  2. Bonds & Fixed Income

    6 Factors That Influence Exchange Rates

  3. Economics

    In Praise Of Trade Deficits

  4. Economics

    Overseas Investing No Protection Against ...

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center