One will always find government debt in foreign currency for a nation having external issues. After the Bretton Wood system broke down and nations freely floating their currencies, they realized it is actually difficult to just float and let the fx markets find the clearing price. Hence there is official intervention in the currency markets, issuance of debt in foreign currency, holding of foreign reserves etc. Most people look at official intervention as the central bank preventing the price from falling too much but it’s more than that. It clears markets and prevents a prophecy to build up. For example if the currency falls, it may lead to expectations building leading to further outflows. So I saw STF in the mikenormaneconomics thread saying that the government didn’t behave in an MMT prescribed way and such – but it is impossible for the Treasury of most nations to behave that way. It’s “operational reality”.Ramanan in a comment at Modern Monetary Realism
According to MMT, there are two constraints on a currency sovereign, inflation rate and fx rate. There continues to be disagreement over the conception of the fx rate, in that the MMT position is generally understood to be that in a non-convertible flexible rate monetary system, floating rates are self-correcting so that markets will always clear for a currency the issuer of which does not take on foreign debt or fix its fx rate. While some qualifications are added, opponents do not believe they are sufficient and a more detailed analysis is necessary.
Ramanan and others dispute the MMT stance, holding that it needs to be carefully qualified with respect to the general case and specific instances, with the US being a special case that cannot be extended to many other countries, and that even the US cannot presume to enjoy its "special privilege" forever without capital flight and therefore exogenous pressure to raise interest rates to attract capital and curtail demand in order to decrease imports.
I hope I summarized both positions correctly. Please correct me if I did not.