Foreign Debt


DEFINITION of 'Foreign Debt'

An outstanding loan that one country owes to another country or institutions within that country. Foreign debt also includes due payments to international organizations such as the International Monetary Fund (IMF). The debt may be comprised of fees for goods and services or outstanding credit due to a negative balance of trade. Total foreign debt can be a combination of short-term and long-term liabilities.

BREAKING DOWN 'Foreign Debt'

One relative measurement of foreign debt safety is that foreign exchange reserves should not be less than outstanding short-term foreign debts. Governments can lower their foreign debts by rescheduling their obligations or simply by paying them off. Foreign countries typically hold U.S. debt in the form of short- and long-term government-issued bonds.

  1. Bond

    A debt investment in which an investor loans money to an entity ...
  2. Bondholder

    The owner of a government or corporate bond. Being a bondholder ...
  3. Debt

    An amount of money borrowed by one party from another. Many corporations/individuals ...
  4. Treasury Bill - T-Bill

    A short-term debt obligation backed by the U.S. government with ...
  5. Debenture

    A type of debt instrument that is not secured by physical assets ...
  6. Trade

    A basic economic concept that involves multiple parties participating ...
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