Foreign debt refers to the money that a country owes to foreign lenders, which can include other governments, international financial institutions, or private investors. This debt is often incurred to finance development projects, stabilize the economy, or cover budget deficits. Countries typically repay this debt with interest over time. When a nation borrows from abroad, it may face challenges such as currency fluctuations and economic instability. High levels of foreign debt can lead to concerns about a country's ability to repay, potentially affecting its credit rating and access to future loans. Managing foreign debt is crucial for maintaining economic health.