Standard & Poor's(S&P) has put a 'negative watch' on Argentina's credit rating, citing "rising restrictions to international trade" and "steps to nationalise oil company YPF".
Despite affirming its 'B' credit rating, the ratings agency said Argentina's recent actions "could exacerbate existing weaknesses in the economy", pointing to high inflation and increasingly rigid government expenditure, the Telegraph reports.
The news came after Spain's Repsol threatened legal action against any company that attempts to invest in YPF following its expropriation by Argentina last week.
The government had said it intends to "pay nothing at all" in compensation to the Spanish oil company.
Julio De Vido, Argentina's planning minister, has already approached Brazil's state-run oil company Petrobras over investment in YPF and plans to include other foreign oil companies including Exxon, Chevron and ConocoPhilips.
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