The central bank's reserves in Argentina dropped to $26.7 billion, the lowest level since 2006. The Argentina government is taking all possible measures to defend its currency Peso ahead of elections in the country this month. With an objective enhancing reserves level, Argentina has taken up currency swap, debt payments, dollar sales, etc. 

The gross reserves in Argentina slide $94 million to $26.7 billion, according to a statement from the Central Bank. Being locked out of global capital markets, Argentina has been facing foreign exchange crisis and weakening of its currency Peso. The country even took severe measures including burning cash to support Peso ahead of elections on 22 November 2015. 

Argentina government managed to keep reserves at certain level by currency swapping of $11 billion with China in 2014. The government has also implemented debt payments, dollar sales to individuals for savings, etc. The Argentina central bank is constantly intervening in the foreign exchange (forex) market in support of Peso. The weakening Peso has resulted in heavy losses in funds during October. 

Argentina is considered as one of the world's breadbaskets. Grain exporters are upbeat on the revenues to be generated in 2016. Though there's sales drop, which is expected to last short term only, and reduction in cash flow of Argentina Central bank, the situation will turn positive from next year onwards, feel exporters.

Exports fell 68.5 percent on year-on-year basis to $192 million during the week ending 31 October. February is generally a weak month for sales. This is the reason, first quarter of every year indicates normal growth. The aggressive buying dollars last month indicated the worst week of the year for Argentina central bank as it fast eroding the reserves.

The government has also utilized $5.9 billion of reserves to honor the bond payment in October. The Central Bank sold $610 million in the forex market in one week alone. The bank sold $549 million in the week ending 25 October.

The government has also sold $700 million to individual Argentines for savings in October. On the other hand, Argentina economy is witnessing soaring inflation.

According to economists, the markets have overlooked the heavy debt repayment schedule of Argentina as it's due in 2016. If the government defaults, it would put additional pressure on the central bank, which has already been suffering from dwindling down of foreign reserves over the past one year as it pumped in US dollars to maintain the peso's peg against the greenback.

Argentina President Cristina Fernandez de Kirchner's term is concluding on 10 December and the nation is heading for elections. In support of Peso, Argentina Central Bank is buying US dollars at 15.14 pesos. The government's strict measures have resulted in black market deals in the country.