Argentina’s central bank will have to toe a politically fraught line between providing support for the crumbling peso without blasting through its reserves to salvage the currency as a presidential election looms in October, analysts said on Friday.

The peso was in free-fall for most of this week after a shock primary election result on Sunday, when center-left presidential candidate Alberto Fernandez trounced center-right President Mauricio Macri.

The scale of Fernandez’ victory suggested he could win the upcoming ballot in the first round, but potentially be left as leader of a country that has very few foreign reserves left, raising the chances of a debt default.

“One strategic element for the government and the opposition is how the current reserves of the central bank are used,” consultancy Fundacion Mediterranea said in a note.

“The opposition does not want the current administration to leave the central bank with very few reserves, and it is convenient for the government that the proposals announced by the opposition are reasonable for the markets.”

The central bank, which is nominally independent but has long been prone to executive interference, has about $66 billion in reserves, of which about $20 billion are free resources that can used to pay debt and stabilize the peso, according to an Argentine government official. Since Sunday’s vote, the central bank has auctioned a total of $503 million.

After losing about a quarter of its value in the first three days of the week, the peso has since stabilized. On Friday morning it was up over 2% at 56.25 pesos per U.S. dollar, giving policymakers a bit of breathing room.

The peso’s collapse, which comes amid growing fears of a global recession, forced the central bank to sell dollars and oblige private banks to trim their dollar holdings and provide liquidity to the market.

www.reuters.com

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