Would China currency-swap deal with Argentina be made useless if Argentina would switch to the U.S. dollar?

Question

The People’s Bank of China made available $6.5 billion to Argentina from a currency swap line the countries share, President Alberto Fernandez announced Wednesday after meeting with President Xi Jinping in Beijing.

The move comes right before Argentina’s presidential election Sunday as political uncertainty roils markets and the peso’s parallel exchange rate sells off. Fernandez said he originally requested $5 billion, and Xi granted an additional $1.5 billion.

https://www.bnnbloomberg.ca/china-lets-argentina-tap-extra-6-5-billion-from-swap-line-1.1986348

Would China currency-swap deal with Argentina be made useless if Argentina would switch to the U.S. dollar? If not, how can Argentina use the currency-swap deal in such an economic framework? In my understanding, currency-swap deals are only good to prevent speculative attacks against a weak currency and switching to the USD would mean that Argentina cannot suffer from such an attack.

Answer 1

Since Argentina can’t print US dollars (without committing an act of war against the US), it can easily run out of them if its dollar outflows exceed its inflows, which is quite likely. That’s why rational countries have either currencies of their own or agreements with a foreign central bank (such as Eurozone countries and the ECB) to provide more currency if needed. This deal will give Argentina access to more dollars to defend against such a contingency, and will thus still be useful if those dollars are needed for government spending rather than for intervention in the currency markets.