international debt


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Foreign Debt

The debt one government owes to a foreign government or corporation. Foreign debt may occur when one buys the debts securities issued by another government. While foreign debt can be advantageous because it may allow a country to finance its development or other government functions, a government owing too much foreign debt (or too much debt generally) may find itself beholden to another country. It is also called external debt or international debt. See also: Debt crisis.

international debt

the outstanding LOANS owed by borrowing countries to the WORLD BANK, INTERNATIONAL MONETARY FUND, CENTRAL BANKS and private sector COMMERCIAL BANKS, and other lending institutions.
International debtclick for a larger image
Fig. 97 International debt. External Debt/GNP ratios. Source: World Development Report, World Bank, 2004.

international debt

the monies owed to the international community for providing loans in the form of ECONOMIC AID, mainly to DEVELOPING COUNTRIES, to finance their economic development programmes and loans to cover countries’ balance of payments deficits. Loans are provided both on a multilateral basis by international institutions such as the WORLD BANK and INTERNATIONAL MONETARY FUND and on a

bilateral, country-to-country basis. For the most part, international loans incur interest charges and have to be repaid in full over a specified redemption eriod.

International debt can play a useful role in facilitating economic development by providing funds to countries lacking domestic capital and helping countries with foreign exchange difficulties. From an individual country's perspective, modest levels of international debt are tolerable, but problems arise when a country becomes critically ‘debt-laden’. The failure of many developing countries to break out of the ‘poverty trap’ (arising from exploding population growth not matched by economic progress) has posed a big problem for the international community in recent years. For these countries, foreign exchange earnings are often insufficient to service annual interest charges, let alone pay off outstanding debt.

The World Bank has officially listed 41 countries as being ‘heavily indebted’. Fig. 97 shows the ratio of debt to current gross national product (GNP) for a number of these countries. In response to this situation, the World Bank has organized various debt ‘relief initiatives, encouraging its richer members to ‘write off debts wherever possible.

In 2003, outstanding loans to the developing countries amounted to more than $2,100 billion and annual interest charges on this debt amounted to some $300 billion.

References in periodicals archive ?
Local debts, meanwhile, have decreased from Rs10.899 billion to Rs9.775 billion while international debt, most of which is in US currency, has risen from Rs681.855 billion to Rs803.412 billion.
QNA Doha The Ministry of Finance announced on Sunday that Qatar successfully marked its return to international debt markets by pricing a $12 billion triple tranche bond, offering $3 billion in five-year notes, $3 billion in 10-year notes and $6 billion 30-year notes.
The development of local and international debt markets runs alongside the Kingdom's efforts to boost foreign participation in its equity markets.
EXIM Bank, one of the world's premier export finance institution offering a comprehensive range of products and services, with this issuance became the year's largest quasi-sovereign issuance from Asia in the international debt capital markets.
Moody's Investors Service said in a recent report, titled Sovereigns--Sub- Saharan Africa, Risks of financing stress build across the region, especially at lower end of rating scale, that the risk of sovereign financing stress is increasing in Sub Saharan African (SSA) countries off the back of a peaking of maturing international debt approaches coupled with deteriorating credit quality, rising interest rates and an untested institutional capacity to take mitigating action.
Egypt returned to international debt markets to cover its financing needs following its successful sale earlier this year of $4 billion in five-, 10- and 30-year bonds.
The company offers commercial and consumer debt collection, debt surveillance, international debt collection, purchased debt services, sales ledger administration, and optimisation services.
Riyadh : Saudi Arabia may follow its first international debt issuance with an Islamic bond sale, Finance Minister Ibrahim Al Assaf said, as the Kingdom seeks to diversify borrowing sources.
ISLAMABAD -- The government plans to raise $1 billion from the international debt market through issuance of Eurobonds in October 2016 with the objective of building foreign exchange reserves ahead of approaching debt repayments from next year onwards.
Bankers expect plenty more activity from Omani borrowers in the international debt markets, especially after the sovereign secured a $1bn loan in January
Now we are going to the international debt market." Al Saleh declined to comment on the size or timing of international bond sales, saying no decision has been taken yet, though he rubbished media reports that $5 billion of debt would be sold in the third quarter of this year.
The report added that domestic debt issuance could 'crowd out' private sector borrowers, while international debt issuances increase exposure to foreign debt.

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