What is foreign currency denominated debt of a country?
Answers
That is due to the definition of national product and domestic product. In the case of GDP (gross domestic product) the domestic transactions and outputs are recorded. However, in the case of GNP (gross national product) to that GDP the net factor income from abroad is added. Please note that it is "Net" factor income from abroad and that means while we may receive income from abroad there might be people repatriating their income earned in India to their home countries and that is factor expenses earned by people of other countries living in India. This is deducted from the total income received from factors of production abroad and that's how we get Net Factor Income from Abroad.
When we borrow money abroad and if that is denominated in foreign currency then we will have to pay the interest and principal back to the lenders. When we pay this borrowed money we will have to remove it from income earned from abroad.
Assuming that we don't have any income from abroad then that figure will be negative. In those cases the Gross National Product will always be less or declining even while the GDP might tend to grow.
I hope this was simple enough to understand.