MSCI Inc. said its upcoming decision on whether to reclassify Argentina to emerging market status "will be more difficult" given the country's current market slump, Reuters reported.

Earlier in May, the Argentine central bank hiked its monetary policy rate to a record 40% as it has been trying to combat inflation and halt the peso's rapid depreciation. The country has also turned to the International Monetary Fund for a potential bailout.

According to Sebastien Lieblich, MSCI's managing director, they will wrap up an investor consultation within a few weeks on whether to add Argentina to emerging market status from its current frontier market status. MSCI will hold its annual classification review in June.

"Clearly the discussions will be and the decision will be more difficult to take, given the latest on Argentina. Now whether that will spur a structural change or structural issue, we don't know," Lieblich said.

Argentina's capital restrictions on its equity market led MSCI in 2009 to relegating the country's stocks to its frontier index, which includes smaller stock markets. MSCI did not reclassify Argentina to emerging markets status in its June 2017 review, noting that the country needed more signs that President Mauricio Macri's market-friendly reforms would be irreversible.