(Adds details, quote from source)
By Jorge Otaola and Nicolás Misculin
BUENOS AIRES, Dec 11 (Reuters) - Argentina's new governmentis negotiating with a group of Wall Street banks for a creditline worth up to $7 billion to bolster its low foreign reservesand help it lift capital controls, a banking source said onFriday.
Center-right President Mauricio Macri, who took office onThursday, wants to move quickly to remove currency controls thatrestrict access to dollars but is stymied by the central bank'sprecariously low hard currency stocks.
The commercial banking source said Argentina was in talkswith HSBC, JPMorgan Chase & Co., Goldman Sachs, Deutsche Bank and Citigroup Inc.
But he said there remained obstacles to an agreement andthat no immediate deal was likely.
"The banks are working on a deal. It would be difficult foranything to come about immediately. There are some key detailsneeded to close this out that are missing," said the source,without giving more details.
The dollar crunch stems from a festering legal battle withU.S. investment firms over unpaid debt that tipped Argentinaback into default in July last year and prolonged the country'sbanishment from international debt markets.
"They're working to lower Argentina's credit risk given thefact that it is in default and keeping in mind the newgovernment is working to resolve that situation," the sourcesaid.
A second source in the central bank confirmed the talks weretaking place but could not confirm the amount being discussed.
Argentina's daily La Nacion reported that beyond thepossible $7 billion being sought via the group of five banks, afurther $1 billion could be secured through a financingagreement with Spanish banks Banco Santander and BBVABancomer.
Argentina's central bank counts its total reserves at $25billion, but some private economists say net reserves are as lowas $3 billion to $6 billion. (Additional reporting by Hugh Bronstein; Writing by RichardLough; Editing by Chizu Nomiyama and Meredith Mazzilli)
HSBC Holdings (HSBA)