 When Brazil, as its largest neighbor and trading partner, devalued its own currency in 1999, the Argentinian peg to the US dollar prevented it from matching any of that devaluation, leaving its tradeable goods to be less competitive with Brazilian exports.Along with a trade imbalance and balance of payment problem, the need for credit to finance its budget deficits made Argentina's economy vulnerable to economic crisis and instability.In 1999, the economy of Argentina shrank by 3.4%.