MercoPress. South Atlantic News Agency

Argentina was studying a letter from the IMF.

With the clock ticking toward a 3.1-billion-dollar debt deadline that Argentina faces with the International Monetary Fund today, the two sides were discussing steps the lender wants Argentina to take to keep a loan deal on track, sources said.

An Economy Ministry spokesman said Argentina had received a letter from the Fund and the government was studying it.

Sources close to the talks said the two sides remained stuck on IMF demands that Argentina finally approve its own choice of banks to restructure its 88 billion dollars in defaulted debt and raise the bar on how many creditors must accept its debt offer to deem it a success.

There was some progress, one source close to the talks said on condition of anonymity, referring to a meeting between Economy Minister Roberto Lavagna and IMF official John Dodsworth in Buenos Aires yesterday.

Work is ongoing Argentina is refusing to delve into around 15 billion dollars in international reserves to repay the 3.1 billion due to the IMF today, saying the fund must first promise it will effectively reimburse it.

The president has made his decision clear, a presidential spokesman said yesterday, referring to President Nestor Kirchner repeated refusal to pay unless the IMF yields first and signals it will approve the second review of a three-year, 13.3-billion-dollar loan programme, which would release 3.1 billion dollars to Argentina.

At the inauguration of a telephone company customer service centre in the city district of Barracas yesterday, Kirchner refused to be drawn on a question whether he would authorize payment today. It has all been said, it is all quite clear, Kirchner stated.

Central Bank President Alfonso Prat Gay was seeking to drum up support from peers among the Group of Seven rich nations the IMFs main shareholders at a meeting of central bank heads in the Swiss city of Basel, a bank source said.

Last time to pay or not will be today at midday local time.