It's hard to say, I think the BCRA is running on fumes and something has to give to result in another influx of dollars to keep the pyramid scheme going. As you said, it could be lower retentions (further hurting tax revenue), or, IMO, more likely in the immediate future, another one of these rob Peter to pay Paul loans where they give Argentina another disbursement of funds once it makes the payments due in H1 2025 for it's international debt maturities (including those due to the IMF itself).
The problem is once again this isn't sustainable, the underlying problem is that the peso is expensive, dollar cheap, and tax pressure high along with the Argentine economy in recession. The only thing keeping the lights on is the fact that we're not in a global commodities bust cycle. If we enter one all bets are off. That being said, it might not even take that level of chaos to cause the exchange rate to return to reality. It's possible that the IMF forces Argentina to end the cepo, which in doing so would be a double edged sword because the BCRA would get dollars needed to pay loans, but inflation would rise again.
The irony of all of this of course is that the exchange rate causing inflation only matters for as long as there is a peso. If Milei actually did what he campaigned on (or didn't artificially prop up the peso) this wouldn't be an issue. If he wants someone to blame, look in the mirror.
I think what we're seeing is the crux of the author's piece from the original article: it didn't have to be this way. Even if you disagreed with dollarization (like many of us, myself included did) doing so would have likely been less destructive in the long term than whatever it is we have now. We have no dollarization, cepo intact, a dollar tarjeta of $1,664, dollarized prices, no BCRA reserves, increased tax pressure, inflation ready to shoot up once the cepo is removed, and everything from flour to smart phones which are made here being cheaper abroad in wealthier countries.
Because the laws of supply and demand are ignored in Argentina. Demand falls, so prices increase here to make up the lost revenue. It went from 6K to 8K from June to December, why wouldn't it repeat the same upward trajectory for as long as there is inflation?
Last night someone was in the US and posted the price of a bottle of Argentine wine in a grocery store there vs. Coto. If I remember correctly, it was $25 USD and 35K ARS respectively. It doesn't make sense. Even if we assume that wine has a 0 rate export tariff here (which I don't think it does), and a 0 rate import tariff in the US (again, don't think it does, could be wrong) that would make it roughly the same price, $25/bottle before including things like shipping, insurance, delivery, brokerage fees, etc. Now, I assume, again, this isn't the case, which means the winery is probably exporting it for much less, because these costs have to be added, plus the grocery store is still making a profit on the wine, yet it's STILL cheaper than being sold here having traveled to the other side of the planet.
This means, to me, the most likely explanation is that Coto and the winery are gouging Argentine consumers, and it's not as the libertarians like to claim, the VAT's fault, otherwise the price in the US would be much higher if both bottles of wine are being sold to wholesalers for $25/each. This is why I think the price will continue to increase, because they can get away with it.
