There are a couple reasons Argentina hasnâ€™t been able to keep its central bank account in check.
For one, an artificially strong currency has made foreign goods more attractive, and led the country to become more reliant on imports. While Argentina still enjoys a trade surplus, it has been shrinking because of growing energy imports. Argentina has had trouble borrowing money from abroad since defaulting on its debt in 2001, so it has to finance the bulk of its growing imports with its reserves.
Then thereâ€™s Argentinaâ€™s high inflation, which has coerced Argentines into holding on to US dollars rather than spending them, and using any pesos they have on hand to buy more US dollars. Those dollars, however, arenâ€™t making their way to the central bank. Argentines are using their foreign cash to buy goods abroad or keeping it as collateral in case the countryâ€™s monetary system collapses again.
Argentina plans to spend another $8 billion of its reserves to pay off debts through the end of this year, which will leave very little wiggle room for its central bank to finance the countryâ€™s fiscal affairs. Soon the country could find itself incapable of paying its creditors and financing its importsâ€”a recipe for another economic crisis.