Argentina may have to turn to global credit markets next year for the first time since a 2002 default as its fiscal accounts worsen and excess foreign reserves - a key source of financing - dry up.
The central bank's "available" or excess reserves - which surpass the amount needed to back the country's monetary base - shrank to $8.71 billion in June from $16.89 billion a year earlier, according to local bank Banco Mariva.
The government earmarked about $12 billion in reserves to pay private creditors in 2010 and 2011. But the reserves available for use are dwindling as the monetary base expands by nearly 40 percent year-on-year, private estimates show. At the same time, the trade surplus in Latin America's No. 3 economy is shrinking as strong domestic demand and high inflation stoke imports, threatening to erode reserves and the current account balance of payments.
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