The IMF deal is not popular with the masses

The deal - which took weeks to negotiate - means that Argentina will only have to pay interest on its $21bn (�13bn) of debt for the next three years.

The deal, formally approved by President Nestor Kirchner late on Wednesday, comes just a day after the country defaulted on a $2.9bn debt payment due to the IMF.

"This accord will strengthen Argentina and help spur economic recovery," said president Nestor Kirchner.

"I am pleased to welcome President Krichner's announcement of Argentina's economic programme that aims at restoring strong economic growth and reducing poverty," said IMF chief Horst Koehler.

Argentine victory?

But analysts say the IMF had to cave-in on some of its key demands and that the Argentine government gained the upper hand in negotiations,

Did Nestor Krichner get the upper hand?

Two sticking points had been the IMF demands that banks be compensated for last year's collapse in the value of the peso, and that utility prices must rise.

The agreement did not set a deadline for either of these two issues.

These measures were highly unpopular domestically and perceived to be helping out big business at the expense of the poor.

On Tuesday, thousands of unemployed Argentines demonstrated against the IMF in Buenos Aires.

Protests

The protesters vowed to express their disapproval of the agreement again on Thursday, planning to circle the Central Bank.

More protests are planned on Thursday

"If the national government signs an agreement with the IMF, there will be utility rate increases, there will be more hunger and there will be more unemployment," said protest organiser Juan Carlos Giordano.

Argentina's inability to repay its vast debts resulted in one of the biggest defaults on record at the end of the 2001.

The country's worst ever economic crisis ensued, resulting in widespread poverty and unemployment.