BUENOS AIRES, June 8: Argentine Economy Minister Roberto Lavagna said on Friday he expected the International Monetary Fund to agree to an aid pact by mid-July despite news that negotiations have stalled.

Sources close to the negotiations said in Washington on Thursday that negotiations ran aground, after talks by telephone between Lavagna and IMF First Deputy Managing Director Anne Krueger failed to produce enough agreement to send a fund mission.

“The pact will be ready by the end of June or by the middle of July, those are the dates,” Lavagna told reporters.

The IMF had hoped to announce it would be sending a mission to Buenos Aires next week to start the ball rolling on negotiating a new loan pact with Argentina.

Before talks stalled, IMF Managing Director Horst Koehler said he hoped to cement a deal within the 45 days mooted by the Argentine government. But he stressed the fund would not be rushed.

The US Treasury Department said on Friday it supported sending an IMF mission to Argentina next week, despite the fact the fund’s plans were on hold.

Lavagna and Krueger are due to speak again on Monday.

Sources say the IMF is still not satisfied with a string of economic and political reforms Argentina has made in order to woo aid from the fund. The money is badly needed to ensure Latin America’s struggling No. 3 economy will not default on payments to the lender as it did on part of the $140 billion debt pile in January.

The IMF cut off access to a $22 billion loan in December after Buenos Aires failed to control rampant government spending. Now the nation is cut off from financial markets, and a new IMF deal is vital to hopes of convincing other lenders like the World Bank to help end Argentina’s worst ever economic crisis via aid.—Reuters