Earlier this week, MSCI announced that Argentina will be included in its MSCI Emerging Markets (EM) Index. The much-anticipated news brought relief to investors, as the country has faced a number of challenges this year, with a stronger dollar and rising rates in the U.S. creating volatility in the foreign exchange and equity markets.
The upgrade to EM provides a vote of confidence from the international investment community in Argentina’s ability to maintain market function and continue its economic normalization process.
What does this decision mean for investors? The below commentary provides an overview of MSCI’s reclassification decision and what the EM status means for Argentine equities and other investment opportunities going forward.