(Adds foreign currency reserves levels)
By Sarah Marsh and Jorge Otaola
BUENOS AIRES, Oct 5 (Reuters) - Argentina said on Monday it had completed a $5.9 billion payment on maturing Boden 15 bonds, leaving a larger-than-expected hole in the South American country's foreign currency reserves.
Its foreign currency reserves fell 14.6 percent to $27.71 billion, almost entirely due to the debt payment. Latin America's No. 3 economy relies on its hard currency reserves to finance imports and prop up its currency.
"It is the most significant debt payment in the last few years," Central Bank President Alejandro Vanoli said on Twitter. He added that the "level of reserves is sufficient for the central bank's monetary policy."
Argentina's access to foreign capital markets is restricted due to its protracted legal battle with creditors suing for full repayment of debt it defaulted on in 2002.
Needing to plug the fall in reserves and finance a surge in spending, the economy ministry will hold three debt auctions this week, with all the notes being governed by local law.
Earlier on Monday, the ministry said it would on Thursday top-up two bonds maturing in 2017: its dollar-denominated Bonad, to be redeemed in pesos at the official rate, and its peso-denominated Bonar.
It would seek to raise $500 million worth of Bonads and $3 billion pesos ($317 million) of Bonars, although it could issue more, the ministry said.
But first up this week will be a previously announced $500 million bond sale on Tuesday. That bond, due in 2020, will be redeemed in dollars and have an 8 percent coupon.
The sale comes at an inopportune time, as money flees emerging markets in the wake of fears of tighter U.S. credit, China's slowdown and a collapse in commodity prices.
Traders said there was appetite but that the government would have to offer double-digit yields.
"There's clearly a gentleman's agreement already in place for at least $500 million worth of bonds, but the government could allocate up to $1.5 billion depending on the rates it accepts," said one trader who was not authorized to speak publicly.
"The yield people will demand is around two digits. It's not new money. It's cash that comes from the payment of the Boden 2015." (Writing by Sarah Marsh; Editing by Richard Lough and Lisa Shumaker)