Why do countries need “foreign currency” reserves? Why not just buy things with their own currency?

Question

I was reading about Bolivia running out of US Dollars and the government is shitting their pants.

Why is this a problem?

I don’t have any US dollars and I’m fine. If I buy something from an American website, I don’t need US dollars. I only have Euros in my bank account. I will use my Euro bank card to buy something from the American website.

Same if I buy something from a Japanese website. I don’t need Japanese Yen. I just use my bank card.

I can survive my entire life without worrying about having “foreign reserves”.

So why do countries like Bolivia need foreign reserves to buy some oil or whatever?

In: Economics

Answer 1

when you buy something from an American website your bank does the exchange of euros to dollars

countries need foreign reserves because other countries might want to be paid in their own currency