Argentina has, and should know, that it has no better friend than the US

Condoleezza Rice White House adviser

Long queues formed at banks around the country as cash-starved Argentines rushed to withdraw a limited amount of money.

The peso surged almost 9% due to the cash shortage and rumoured action by the central bank to prevent collapse.

And the leading stock market closed the day 7% lower as investors showed increased nerves about the corporate outlook in the recession-stricken country.

New blood

During the closure of banks and markets, the country's finance minister Jorge Remes Lenicov resigned amid deepening economic crisis.

His successor, Roberto Lavagna, now faces the task of keeping international creditors sufficiently satisfied with progress to resume lending, while at the same time reassuring scared, angry and poverty-stricken Argentines.

On the first point, his opening moves have met with faint praise from the US and the International Monetary Fund.

"We are following developments closely," was the most IMF spokesman Francisco Baker was prepared to offer.

And US national security adviser Condoleeza Rice said Argentina had to do everything the IMF wanted before it could get back to sustainable growth.

That was "not an unwillingness to have international assistance go to Argentina", she said. "It is an understanding that the conditions have to be right so that those resources actually make a difference."

The currency gained almost 9% during the day

As for Argentines, account holders queued on Monday to take out enough cash to pay bills and buy groceries, but were still denied access to most of their deposits after a five-month freeze was tightened.

Senior government figures said the banking freeze, coupled with recent legal changes aimed at making it more difficult for savers to challenge restrictions on withdrawals, should save the banking system from collapse.

"It puts us in a much better shape than last week," said Presidential chief of staff Anibal Fernandez.

From tango to tatters

The immediate future for Argentina, a country which till December saw itself as set apart from the poverty prevalent elsewhere in Latin America, remains highly uncertain.

The economy needs to be oxygenated

Roberto Lavagna Economy minister

Today's Argentina looks very different, with unemployment rates topping 25%, millions now relying on barter to feed and clothe their families, and shanty towns multiplying.

The once-prosperous middle class is now protesting in the streets, and 27 people have died in food riots and other disturbances.

Inflation in April is likely to run at 10%, boosted by the effects of the plummeting currency, while the economy is likely to contract as much as 15% this year.

Four presidents and five economy ministers have come and gone, and Argentines appear to see no sign of improvement.

Cough up

The government is still hoping for a fresh influx of loans from the International Monetary Fund, but the IMF so far shows little sign of opening its wallet.

Mr Lavagna has talked of scrapping laws allowing easy bankruptcy and the prosecution of bankers and investors of which the IMF disapproves.

But this puts him at odds with the Argentine public, which broadly believes that the IMF is there to bail out foreign investors and would be content to let the people starve.

In an attempt to redress the balance, Mr Lavagna added that the IMF needed to spend a little less time making harsh comments against Argentina and a little more time admitting that its own mistakes had also contributed to the disaster.