Argentina's foreign currency reserves have hit their lowest level since the end of last year, the most recent central bank data showed on Tuesday, at a time when the government has been burning through its dollars to help shore up the peso. The recession-hit country has used up more than $16 billion of its reserves, in part to support the currency, since market-friendly President Mauricio Macri was beaten badly in a primary election on Aug. 11, spooking markets about potential political volatility ahead.

Argentina needs its foreign reserves not only to help protect its embattled peso but also to service high levels of dollar-denominated bonds, amid concerns the country could be headed for a default. Reserves were at $50.16 billion on Sept. 12, the latest figures from the Banco Central de la República Argentina show, the lowest since mid-December last year, when inflation spiked and the peso shed half its value against the dollar.

Peronist rival Alberto Fernandez's shock primary victory in August led many to worry that if he wins in the Oct. 27 general election, his running-mate, ex-President Cristina Fernandez de Kirchner, could pursue the interventionist policies she imposed during her two terms between 2007 and 2015.

Copyright Reuters, 2019