The International Monetary Fund Wednesday poured cold water on Argentina's hopes for a much-needed $1.3 billion loan payment in December, saying it was unable to complete the needed review at this time.

"The IMF executive board met this afternoon for an informal briefing on Argentina. Based on the findings of the mission that has been in Buenos Aires, fund management is unable at this stage to recommend completion of the review of the IMF-supported program," the IMF said in a brief statement.

"The fund remains in close contact with the Argentine authorities and is committed to working with them to develop a sustainable program."

Argentina was hoping that the IMF could complete an ongoing review of the economic situation there in order to pave the way for the release of the $1.3 billion loan payment, which authorities need to help stave off a potential default on its $132 billion mountain of debt.

IMF board sources had told Reuters Tuesday that any cash for Argentina was unlikely soon given an increasingly strained relationship between the lender and Buenos Aires.

The bad news is a bitter blow to Argentine Economy Minister Domingo Cavallo, who has been working overtime in recent days to maintain some confidence in the troubled Latin American nation in the face of an ever deepening crisis.

Despite a $40 billion IMF-led rescue package last December and another $8 billion in assistance from the lender in August, fears that the troubled economy could eventually default on its massive debts have caused the economy to lurch from one crisis to the next all year.

The latest twist saw Cavallo introduce draconian banking measures over the weekend that largely froze cash in the banking system and cut the country off financially from the rest of the world.

An IMF mission in Buenos Aires to review Argentina's economic progress ended in tatters Monday when the lender told its point man to return to home base.

The IMF insisted the return of their main negotiator on Argentina was not unusual, but sources inside the IMF said the move was indicative of the annoyance felt among IMF management about not being consulted about the weekend's banking measures despite having a team there at the time.

Argentina had hoped not only to win the $1.3 billion loan payment sometime in December, but was also holding out scant hopes of convincing the IMF to release another $3 billion of aid that it could give under certain conditions.

For now at least, any hopes of fresh cash from Washington seem to be on ice indefinitely.

IMF sources told Reuters the impasse would last until Buenos Aires does something to begin rebuilding trust at IMF headquarters that the government has the political will to follow through on spending cuts and has a credible plan to reinvigorate economic growth.