IMF Managing Director Mr Horst Koehler said today that, due to progress in last week's talks with Argentine Economy Minister Mr Roberto Lavagna, the two would now intensify their discussions on a new loan deal.
"The minister and I have concluded that we are now entering an active negotiating relationship, and I hope that it is continuing as productive as it was last week in my meeting with the minister," Mr Koehler said.
"There is progress in Argentina, not least in the legal area, and in decisions or developments to set up a fiscal framework of sustained discipline. There has to come more but there is progress," Mr Koehler told a meeting of the UN Economic and Social Council in New York.
His remarks reinforced a statement earlier in the day by US Treasury Secretary Mr Paul O'Neill, an outspoken critic of Argentine policy in the past, who also spoke of "progress" in the IMF talks.
"I think they are making progress in their discussions. We are most anxious for them to make progress, and to get back on a good footing in going forward with economic growth in Argentina," Mr O'Neill told reporters after addressing the same UN meeting as Koehler.
A four-year recession in Argentina has been compounded by a 75 per cent drop in the value of the peso currency, unhitched from its dollar peg in January, and a banking crisis which has brought the economy nearly to a halt.
The IMF suspended its aid program for Argentina in December and Argentina defaulted on its public debt a month later. It is now seeking a rollover of its IMF debts to avoid a multilateral default, which would make it a complete financial pariah.