Argentina's government has appointed a new central bank chief, in the midst of a struggle to keep its foundering economy on an even keel.

The incumbent vice president of the central bank, Aldo Pignanelli, has been promoted to replace his former boss, Mario Blejer, who resigned last week.

Blejer clashed with Lavagna over policy

Mr Pignanelli does not enjoy the same high profile that Mr Blejer had, but will bring "great capability" to his new role, according to cabinet chief, Alfredo Atansof.

Mr Blejer was internationally recognised because he had worked for two decades at the International Monetary Fund (IMF).

However, Mr Blejer had clashed with Roberto Lavagna, the economy minister, on proposals to pull the country out of its four-year recession.

IMF wrangles

Mr Lavagna is currently travelling to the US to continue Argentina's negotiations with the World Bank and the IMF for a $20bn loan.

Duhalde admits an IMF deal might not happen

To date, the World Bank and the IMF have appeared reluctant to dig Argentina out of its economic hole.

On Tuesday, a senior World Bank official said that a recent IMF mission to negotiate aid for Argentina made little progress.

"The problems in Argentina are quite deep and take quite a lot of time to work out," said David de Ferranti, a World Bank vice president for Latin America.

Argentine President Eduardo Duhalde also admitted on Monday that he had some doubts as to whether Argentina would clinch the IMF loan.

Tough job

Mr Pignanelli's nomination to head the central bank is expected to win formal approval from the Senate.

Problems he will have to deal with include rising inflation, which is making the cost of living more expensive for Argentines.

The peso also continues to weaken against the US dollar, as investors spurn any chance to invest in Argentina.