We propose a model of sovereign debt management, where a state trade some bonds to service the debt with a pool of risk-neutral competitive foreign investors. At each instant of time, the government decides which fraction of the GDP (subject to random fluctuations) must be used to repay the debt, by paying a social cost. Moreover, it can also choose to devaluate its currency in order to deflate the debt, but producing inflation, and paying a cost in terms of welfare sustainability, or even to declare bankruptcy, by paying in this case a correspondent bankruptcy cost. We show that this optimization problems admits an equilibrium solution, with optimal strategies in feedback form, leading either to bankruptcy in finite time or to a stationary state, depending on the initial conditions.