Argentina’s stock exchange called on the government to lift capital controls that caused it to become the only major Latin America market classified as “frontier,” adding the move may help lure $10 billion in foreign investment.
A requirement for international investors to deposit 30 percent of what they put in Argentina with the central bank for a year “have stopped making sense,” Adelmo Gabbi, the Buenos Aires stock exchange’s chairman, said yesterday in a speech.
Capital controls prompted MSCI Inc. to remove Argentina from its benchmark emerging-market index in June, assigning it the so-called frontier status along with the world’s least developed markets. The controls have helped Argentina avoid volatility, said President Cristina Fernandez de Kirchner.
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“We have to seek a rule so that the inflow of funds won’t be speculative,” she said, without elaborating.
“The deposit requirement was imposed in 2005 and was one of the forces that allowed us to confront the brutal volatility of the markets during the crisis,” Fernandez responded yesterday in a speech at the Buenos Aires stock exchange.
Fernandez’s husband and predecessor Nestor Kirchner imposed deposit requirement in order to discourage speculators from investing in local markets after the country restructured about $104 billion in bonds…
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