The devaluation of the currency or the decline of the exchange rate of the local currency, for domestic debtors, need to pay more local currency to repay the same amount of foreign debt; For domestic creditors, recovering the same amount of foreign exchange principal and interest can get more domestic currency.

When the currency appreciates or the local currency exchange rate rises, domestic debtors need to pay less domestic currency to repay the same amount of foreign debt; For domestic creditors, to recover the same amount of foreign exchange principal and interest can only get less domestic currency.