The International Monetary Fund (IMF) has said it will resume talks about fresh loans for the troubled Argentine economy.

Argentine President Eduardo Duhalde's aim is to secure initial loans of $9bn (�6.2bn) which would be used to stabilise the country's economy.

President Duhalde will be asked to make further promises to the IMF

Earlier this week, the Fund's Managing Director Horst Koehler said that an agreement could be reached within 45 days.

The Fund agreed to send a delegation to Argentina next week after finding that the country has complied with the bulk of its demands for economic reforms.

The IMF's main conditions were that Argentina would push through:

• changes to its bankruptcy law in an effort to protect creditors
• changes to an economic subversion law in an effort to protect foreign investors
• the implementation of spending cuts by the country's provinces

Already talking

Argentina, which is suffering from its worst economic crisis yet, will welcome an advance group of IMF officials next week.

The Fund's chief negotiator, Anooph Singh, will arrive soon afterwards.

In addition, high-level telephone conversations are already taking place.

Earlier this week, IMF Deputy Managing Director Anne Krueger spoke with Economy Minister Roberto Lavagna.

Their phone conversations were due to continue over the next few days, an IMF spokesman said.

Letter of intent

The IMF negotiators are expected to request further commitment from Argentina, most notably assurances that it will be able to control the country's money supply and thereby preventing hyper-inflation from breaking out.

Such economic targets would then be spelt out in a letter of intent.

The IMF would expect the targets to be met before handing over fresh loans.

Desperate needs

Analysts say Argentina is unlikely to pull itself out of its four-year recession unless it secures more IMF loans.

President Duhalde has said that the country's only way to recover is to live up to international agreements and continue to seek help from international money lenders.

The financial crisis has resulted in widespread social unrest, including fatal riots last December, because of rising poverty and unemployment.

The protests were recently intensified amidst rising anti-US feelings which reflect widespread criticism of Argentina's efforts to bow to the wishes of the IMF.

President Duhalde and Mr Lavagna, face the challenge of finding a balance between satisfying both the IMF and the Argentine people.

Sceptical traders

The news that the IMF has agreed to renew talks about resumed lending failed to bolster sentiment in the financial markets where the sliding Argentine currency, the peso, slipped further.

The peso, which has lost more than 70% of its value since a long-standing peg to the US dollar was removed in January, lost 1.35%.

"Speculation about the future of the economy and the flip-flopping of the IMF is making people seek shelter by buying dollars," said one trader.

Argentina's leading MerVal stock index gained 0.43%.

But the slight rise is not an indication that corporate Argentina is doing alright.

Telecom Argentina has revealed that the net value of the firm has fallen to $30m, less than 2% of its value ahead of January's devaluation.