Abroad borrowings are basically in foreign currency, and the borrowed foreign currency cannot be directly circulated domestically.

But the money can first be used to buy foreign machinery and equipment. Secondly, it can be used as a reserve (the currencies of the world's major powers were basically gold standard at that time).

In addition, as far as I know, it can also be used as war reparations. For example, in the famous Sino-Japanese War indemnity, the Japanese ended up receiving pounds instead of silver. (It is said that China also suffered a big loss in terms of the exchange rate between silver and pounds)