Economics
If Argentina Wants Emerging-Market Status, It Must Avoid Capital Controls
- Volatility in Argentine peso ‘creates noise’ for decision
- MSCI delayed decision to upgrade Argentina last June
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Argentina’s long-awaited upgrade to emerging-market status hinges on whether President Mauricio Macri can resist the return of capital controls he erased since taking office, according to MSCI Inc., the index provider set to decide on the promotion as soon as next month.
Macri swept into office in late 2015 vowing to undo years of restrictive policies, aiming to jump-start investment and growth. He took the first step within a week of taking office, allowing the peso to float freely. While a resumption of capital or currency controls hasn’t been mentioned during the peso’s current swoon, MSCI cited them in 2009 as one reason it dropped Argentina to "frontier" status alongside the likes of Mauritius and Kazakhstan.