Greece clears IMF hurdle but don't relax just yet

With news that talks between Greece and its lenders are making slow but sure progress and Greece made a multi-million euro loan repayment to one of its lenders a day early, goodwill towards the country is hitting highs not seen for months. But analysts warn that the money and good spirits will quickly run out.

Keen to show the world that it can honor its debt obligations, the Greek finance ministry made a 750 million euro ($838.2 million) loan repayment to the International Monetary Fund (IMF) on Monday evening, a day before it was due.

Greece said it tapped an emergency IMF holding account to repay the debt, according to Reuters.

Kostas Tsironis | Bloomberg | Getty Images

The move came after a what seemed a rare good news day in terms of talks between Greece and its lenders on reforms, without which the country cannot receive a vital last tranche of bailout aid worth 7.2 billion euros ($8.03 billion).

Jeroen Dijsselbloem, the head of the Eurogroup, told CNBC that while progress had been made, there was still work to do.

"More detailed plans have been put on the table, more figures and data, so gradually we are getting somewhere. But on some of the major issues, there are still work to do. (For example on) some of the major reforms which are obviously not very popular measures but are necessary to put Greece on a sustainable footing, and back on a sustainable track," he told CNBC in Brussels Monday.

Read MoreWhy Europe will never give up Greece: Faber

Market analysts have been closely following talks between Greece and its lenders since February when Athens secured a four-month extension to its bailout program so that the leftwing government could implement reforms. While there have been signs of progress, investors and experts stumbling blocks lie ahead.

"The problems are far from over for Greece as it is one hurdle at one time," Naeem Aslam, chief market analyst at Ava Trade, said in a note Tuesday.

"After every challenge successfully accomplished unfolds another hurdle which sets the bar even higher than the previous one," he said, alluding to the 1.5 billion euro loan repayments due to the Fund in June alone.

More work to do

While European officials are under no illusion that Greece has done enough work on reforms to merit more aid, Greek Finance Minister Yanis Varoufakis sounded a more positive note, telling CNBC Monday that he expected a deal to be found "in the next couple of days."

Read MoreVaroufakis' first 100 days: All style, no substance?

However, he also told reporters gathered in Brussels that his country's financial situation was "terribly urgent" and alluded to the fact that a liquidity crisis could take hold in a matter of weeks.

One market analyst believed a reform-for-aid deal was still far off but agreed with Varoufakis' assertion that the money would soon run out.

"The reality is that neither side seems in the mood to back down, making capital controls and a default more or less inevitable, despite assertions that progress is being made," Michael Hewson, chief markets analyst at CMC Markets, said in a note Tuesday.

"Over the last few months we've been warned several times that Greece was about to run out of money, only for government officials to somehow manage to come up with the funds at the last minute," he said.

"(But) now that Greece has made this (IMF) payment, this particular narrative is starting to become rather tired and at some point this train will hit the buffers, and the money really will run out."

- By CNBC's Holly Ellyatt, follow her on Twitter @HollyEllyatt. Follow us on Twitter: @CNBCWorld