Fitch was responding to a government decree in Buenos Aires that required state-owned companies and institutions to convert their foreign currency debt into domestic peso debt. The rating agency announced that it would further downgrade Argentina to "limited default" after implementing this instruction.

Argentina's Deputy Economy Minister Gabriel Rubinstein said on Twitter that the government wanted to "strengthen the macroeconomic order" with the debt swap. The decision is intended to halt the depletion of Argentina's international currency reserves while supporting markets and fighting runaway inflation in the country.

According to the central bank, Argentina only has international reserves of a good 37.5 billion dollars (34.4 billion euros). According to analysts, the net volume is still significantly lower.

Argentina is suffering from a serious economic crisis and has one of the highest inflation rates in the world. In the middle of the month, the government said annual inflation rose to 102.5 percent in February. More than a third (36.5 percent) of the country's 47 million people live in poverty, including 2.6 million people in extreme poverty.