By Andrew Walker BBC economics correspondent in Dubai

The IMF says it hopes the programme will reduce poverty

The agreement between the International Monetary Fund and Argentina is the latest chapter in a relationship that has been pretty tetchy at times.

The loan will enable Buenos Aires to maintain repayments on old debts to the organisation without having to dip into its reserves of foreign currency.

At $12.5 billion over three years, it may not sound much.

But it means Argentina will not have to divert resources from other pressing needs to pay the IMF.

A senior IMF staff member said the programme is intended to ensure that economic growth is sustained and poverty reduced rapidly.

It is almost an article of faith in international financial circles that countries should not default on IMF or World Bank debts.

And certainly, life becomes a lot more complicated for governments and central banks if they do.

Reform disputes

On one occasion last year, the government threatened to default on IMF loans unless a new one was agreed.

The IMF believes President Kirchner can implement the reforms

The IMF Managing Director, Horst Koehler, responded in a BBC interview, calling for an end to such "blackmail".

There have also been disputes about the implementation of economic reforms agreed with the IMF.

In recent incidents, the IMF says that a loan instalment was paid on the basis of information from Argentina that proved to be incorrect - some legal reforms the authorities said they had made had in fact not been done.

And then a repayment on an old loan was late.

'No guarantees'

So that background invites the question - is this new loan a case of throwing good money after bad?

Mr Koehler acknowledges that there is a risk.

"There are no guarantees" that it will work, he says.

But he believes Argentine President Nestor Kirchner can build a political consensus to implement the economic reforms.

So what are those reforms?

We do not have the official chapter and verse.

Argentina has decided that it will not yet publish the document - called a letter of intent - setting out its promises to the IMF.

But the head of the IMF department dealing with Argentina, Anoop Singh, has sketched out the main points.

Firstly he mentioned consolidation - strengthening - of the government finances.

He says they need to improve the effectiveness of tax collection and reduce the amount of tax exemptions.

IMF programmes often involve extremely controversial cuts in public spending.

This time, Mr Singh says, that is not the case. In fact he says there should be an increase in public investment.

'Fraying' relations?

Mr Singh also said the programme includes measures to strengthen the banks and improvements in the climate for public investment.

The IMF is also keeping a close eye on negotiations with those foreign private creditors.

Many of them will probably accept large losses - what is called a haircut in these circles.

Even so Argentina would end up having to pay something to them, instead of the very little it has done since the default in late 2001.

Failure to agree could cause Argentina's trade relations with the world to start to "fray", according to one IMF official, and economic growth could slow down.

So, Argentina's economic recovery continues with the help of further support from the IMF.

But it seems that some top IMF officials are not that impressed.

Chief Economist Kenneth Rogoff said that Argentina's performance "is not so exciting when one compares it with other debt crisis countries".

Some others, notably in East Asia in the late 1990s, experienced very sharp rebounds, much sharper than Argentina has had so far.