WASHINGTON, Oct. 10 — The International Monetary Fund is edging closer to a deal on stretching out payments on nearly $11 billion in loans to Argentina, according to officials at the fund as well as in the Argentine government.

Argentina's finance minister, Guillermo Nielsen, is scheduled to fly back to Buenos Aires on Friday with the draft of a letter of intent for extending the government's payments.

But Argentine officials say that the letter of intent leaves several important disputes unresolved, and that those will have to be settled before an agreement is reached.

"There's been slow progress on a number of issues," said Thomas Dawson, the monetary fund's chief spokesman. "We are still hopeful we can work something out."

Argentina is supposed to repay about $10.9 billion to the monetary fund by the end of next year. It has already defaulted on $140 billion in bonds to private investors, but defaulting on loans to the monetary fund would essentially sever its ties to its only remaining source of outside help.

The issue puts the monetary fund in a dilemma, which some outside experts worry will force its retreat on key demands. Fund officials do not want a relatively large country like Argentina to default; nor do they want to be blamed for making the country's economic nightmare even worse than it already is.

At the same time, the fund does not want to be seen as capitulating to countries that owe it large sums of money. Fund officials say that would set a bad example for other big borrowers like Brazil and Turkey.

Officials say the main obstacle to an agreement is the lack, so far, of a convincing plan for unfreezing Argentina's deposits without encouraging either a run on the banks or the printing of new money so the banks can meet their obligations.

The Argentine government imposed a partial freeze on deposits last December, after it abandoned its policy of a fixed, one-to-one exchange rate of the peso to the dollar. Financial restrictions have expanded since then. To protect banks, the government ruled that deposits in dollars would be converted to pesos and that depositors would be restricted in how much money they could withdraw.

The monetary fund has been pushing the government to come up with a plan to lift the freeze over the next several months and to agree that it will not print new money or intervene in currency markets to prop up the peso.

But no one has yet proposed a solution that would both unfreeze accounts and avoid a flight of capital.

Fund officials say they are now in fairly close accord with Argentine leaders. The Buenos Aires government coaxed most provincial governors to pledge to reduce local spending — a main cause of runaway debt.

But it remains to be seen whether the provinces will make good on their promises. And meanwhile, the monetary issues remain unresolved.

Morris Goldstein, a senior fellow at the Institute for International Economics in Washington, said the fund might be too willing to settle for "half a loaf" in Argentina.

"The worry is that this is a large economy and they have a large exposure," Mr. Goldstein said.

The International Monetary Fund is not the only institution that is worried about an Argentine default. Argentina is required to repay $809 million to the World Bank by the end of this month, and officials have already threatened to miss those payments if they cannot reach a deal with the monetary fund.

Source: The New York Times