ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -External debt has to be paid back in the currency in which it is borrowed. Description: External debt can be obtained from foreign commercial banks, international financial institutions like IMF, World Bank, ADB etc and from the government of foreign nations.

Detailed explanation-2: -In broad terms, the IMF has two types of lending: loans provided at nonconcessional interest rates and loans provided to low-income countries on concessional terms.

Detailed explanation-3: -It is defined by the International Monetary Fund (IMF) as debt liabilities owed by a resident to a nonresident, with residence being determined by where the creditors and debtors are ordinarily located rather than their nationality.

Detailed explanation-4: -The IMF provides broad support to low-income countries through policy advice, capacity-building activities, and concessional financial support – meaning it is provided at below-market interest rates. Concessional support through the Poverty Reduction and Growth Trust (PRGT) is currently interest free.