## [# Argentine Stocks Fall On MSCI Downgrade](/sections/news/argentine-stocks-fall-msci-downgrade)
# Argentine Stocks Fall On MSCI Downgrade
Currency controls led to the index provider dropping the country from emerging market status.
[](/contributors/dan-mika)
[By Dan Mika](/contributors/dan-mika)
Jun 28, 2021
Edited by: Dan Mika
Share Email LinkedIn Facebook X (Twitter)
googletag.cmd.push(function() {
googletag.display('js-dfp-tag-article_page_302x26');
});
Loading
ETFs following Argentine stocks fell Friday after MSCI downgraded the country by two steps on its four-step rating scale for foreign investment environments.
*Chart courtesy of [StockCharts.com](https://www.stockcharts.com)*
The index provider said last Thursday that it changed the MSCI Argentina Index from the “Emerging Markets” designation to “Standalone Markets” status due to ongoing restrictions of the flow of funds through the country.
The change takes effect in November, when the country will be removed from the MSCI Emerging Markets Index.
The most recent regime of currency controls began in September 2019 in a bid to stem the loss of foreign reserves in the country’s central bank.
**Currency Controls**
Argentina has used currency controls multiple times since the start of the century to keep citizens from selling the peso for U.S. dollars, particularly as the country reels from a [**missed foreign debt payment**](https://www.nytimes.com/2020/05/22/world/americas/argentina-default.html) last May due to pandemic-driven pressure.
MSCI’s designations are designed to give investors a sense of how difficult it would be to enter a capital market in a foreign country. It has four tiers, ranging from “developed markets” for countries with few barriers to foreign investment, down to the “emerging,” “frontier” and “standalone” designations.
“Despite the fact that the MSCI Argentina Index remains replicable given that only foreign listings are eligible for inclusion to the index, the prolonged severity of capital controls with no resolution is not in line” with MSCI’s standards, said MSCI Global Head of Index Management Research Craig Feldman in a statement.
The downgrade puts Argentina in the same market-grade status as Panama, Lebanon, Palestine, Ukraine, Botswana and Zimbabwe.
The [**Global X MSCI Argentina ETF (ARGT)**](https://www.etf.com/ARGT#overview) and the [**iShares MSCI Argentina and Global Exposure ETF (AGT)**](https://agt) both slid approximately 3.2% on Friday on the news. Both of those ETFs follow an MSCI index broadly tracking Argentine equities.
*Contact Dan Mika at* [***dmika@etf.com***](mailto:dmika@etf.com)*, and follow him on* [***Twitter***](https://twitter.com/DanMikaTweets)
[ Dan Mika ](/contributors/dan-mika)
Dan Mika is a reporter for etf.com. He has previously covered business for the Ames Tribune and Cedar Rapids Gazette in Iowa, and BizWest Media in… [View Bio](/contributors/dan-mika)
Related Topics [Argentina](http://www.etf.com/topics/argentina)
[Equity](http://www.etf.com/topics/equity)
[Latin America](http://www.etf.com/topics/latin-america)
[Emerging Markets](http://www.etf.com/topics/emerging-markets)