Sovereign debt refers to the money that a government borrows to finance its activities and obligations. This debt can be issued in the form of bonds, which investors buy, lending money to the government in exchange for interest payments and the return of the principal amount at maturity. Governments often use this debt to fund public services, infrastructure projects, and other expenditures. When a government accumulates too much sovereign debt, it may face challenges in repaying it, leading to potential defaults. This situation can affect the country's economy and its ability to borrow in the future, impacting investors and international relations, particularly with organizations like the International Monetary Fund (IMF).