Original sin (economics)

Original sin in economics refers to the fact that some countries are not able to borrow money in their own currency from international lenders. Instead, they have to borrow in a foreign currency, usually the U.S. dollar. This is a problem because it means that if their own currency loses value, then they may not be able to repay their loans.

Think about it like this: You want to buy a toy that costs 10 dollars, but you only have 5 dollars. Your friend offers to lend you the other 5 dollars, but they want you to pay them back in candy instead of dollars. You agree, but then the price of candy triples, so now you have to give your friend way more candy than you expected to be able to pay the loan back.

Similarly, countries that have original sin may find that the value of their own currency decreases, so they have to pay back more in foreign currency than they anticipated. This can lead to financial problems and may make it difficult for these countries to develop economically.