Sovereign Debt

Sovereign Debt
It is explained as the financial liability of the national government. It generally refers to the bonds denominated in the overseas currencies. The national governments are generally forced to use sovereign debt when the rise in cost is high or during the rate of exchange becomes unstable. As the debt has to be remunerated in the overseas currency, there is a danger that national government would not be able to pay debt during the time of repayment, making the incomeof autonomous debt costly.