Hard-pressed President Kirchner has kept the $13.3bn deal intact

It will be the latest disbursement under a $13.3bn rescue package agreed with the US-based lender last year.

It was made possible after Argentina met a 9 March deadline for repayment to the IMF of arrears totalling $3.15bn.

Argentina's president had threatened to default on the arrears unless the IMF cleared the way for a fresh disbursement from the $13.3bn package.

IMF acting managing director Anne Krueger said she was making recommendations to the IMF's executive board that would lead to disbursement of the funds.

The board would meet later this month, she said.

Talks with creditors

Argentine cabinet chief Alberto Fernandez described an earlier telephone call between President Nestor Kirchner and Ms Krueger as "cordial and respectful".

The president expressed his satisfaction that the fund understood the Argentine situation. Alberto Fernandez, Argentine cabinet chief Argentine press questions deal

"The president expressed his satisfaction that the fund understood the Argentine situation... Argentina has managed to prevail in its goals with the understanding of the lenders," Mr Fernandez said.

To get the commitment from Ms Krueger on fresh funds, Argentina had to sign up to a new programme of action.

One key element is a promise of meaningful negotiations with private foreign creditors owed billions of dollars.

They have received no payment from Argentina for more than two years.

The Kirchner government has said it wants creditors to accept 25 cents in the dollar for the foreign debt, a proposal that has been strongly rejected by many creditors and IMF officials.

They complain that Argentine has not been negotiating seriously and want at least 65% repaid.

Angry

Failing to pay $2.9bn, Argentina last year was responsible for the single biggest missed payment in the IMF's history.

The IMF has been unhappy with progress in Argentina's negotiations with individual and institutional creditors owed $88bn in defaulted bonds.

Investors are angry because further IMF loans were made to Argentina in September on the understanding the government repaid bondholders.

Argentina is recovering from a record sovereign debt default of $141bn in early 2002.

After four years of recession, Argentina's economy is recovering and grew 8.4% in 2003, according to preliminary government statistics.

Forecasts are for growth of 6.9% in 2004 although the jobless rate is expected to remain in double figures.