Brazil, South Korea, Russia and other developing nations are fighting a losing battle to mute gains in their currencies as a falling Dollar and economic recovery create more demand for their assets than central banks can handle.

South Korea Deputy Finance Minister Shin Je Yoon said Thursday the country will leave the level of its currency to market forces after adding about $63 billion to its foreign exchange reserves this year to slow the appreciation of the Won. Chile Finance Minister Andres Velasco said the same day that lawmakers approved an increase in local debt sales to finance spending, a move that will allow the government to keep more of its Dollar-based savings overseas and slow the peso's rally.

Governments are amassing record foreign-exchange reserves as they direct central banks to buy Dollars in an attempt to stem the greenback's slide and keep their currencies from appreciating too fast and making their exports too expensive. Half of the 10-best performers in the currency market this year came from developing markets, gaining at least 14% on average

The Won, after falling 44% against the Dollar in March 2009 from its 10-year high of 899.69 to the Dollar in October 2007, is now headed for its biggest annual rally since a 15% gain in 2004. It traded Friday at 1,160.32, up 8.6% since the end of December.

Brazil's Real is up 1.6% this month, even after imposing a tax in October on foreign stock and bond investments and increasing foreign reserves by $9.5 billion in October in an effort to curb the currency's appreciation. The Real has risen 33% this year.

Russia's Bank Rossii increased its foreign reserves by 15% since March 13 as it sold Rubles in an attempt to cap the currency's gain. Even so, the surge in commodities prices this year means Russia's steps to fight a stronger Ruble may "not be productive," the International Monetary Fund said Thursday. Energy, including oil and natural gas, accounted for 69.5% of exports to countries outside the former Soviet Union and the Baltic states in the first nine months, according the Federal Customs Service.

Intercontinental Exchange Inc.'s US Dollar Index, which tracks the currency's performance against the Euro, Yen, Pound, Canadian Dollar, Swiss franc and Swedish Krona, touched 74.774 on Nov. 11, the lowest level since August 2008, and has fallen 16% from the high this year of 89.624 on March 4 to 75.550 Friday.

Much of the greenback's decline stems from investors borrowing funds in the US, where the target benchmark interest rate is between zero and 0.25%. They then invest the proceeds in countries with higher rates and faster growing economies!

World Bank President Robert Zoellick said the recent fall of the Dollar is a response to the currency's earlier rise and to market dynamics, giving the US few near-term options for changing its course.

The value of the Dollar depends on confidence in Dollar- denominated assets and also to the movements of other currencies, Zoellick told Asia-Pacific business leaders in Singapore Friday. The Dollar grew in value during the height of the financial crisis because investors viewed it as a safe haven, he said.

France's Finance Minister Christine Lagarde said in an interview in Singapore Friday that her government favors a "strong" Dollar as an appreciating Euro threatens to hurt European exports.

An unprecedented net $47 billion flowed into equities in India, Indonesia, the Philippines, South Korea, Taiwan and Thailand in the last three quarters. That eclipsed the previous full-year high of $33 billion in 2005, nine year of data show.
 
Chile's peso has strengthened 26% this year versus the Dollar, the second-biggest gain among Latin American currencies after the 33% rise in the Brazilian real.

South Korea's economy expanded 6% in the nine months ended in September, the fastest rate since it grew 6.9% during the same period in 2002. The rebound came as companies such as Hyundai Motor Co. in Seoul and Samsung Electronics Co. in Suwon reported surging profits driven by exports.

Brazil's economy emerged from a recession in the second quarter, swinging to a 1.9% expansion after six months of contraction, a Sept. 11 report from the statistics agency showed. Six straight months of job growth, coupled with tax breaks and record low borrowing costs, pushed up consumer spending and helped Latin America's largest economy rebound from the global financial crisis.

On to matters regional now and to Hong Kong where the Hong Kong Monetary Authority said on Friday it planned to submit proposals to the Legislative Council in the first quarter of next year to enable the increase, as market participants have argued that the HK$100,000 coverage limit is too low.

Late last year, the HKMA vowed to guarantee 100% of deposits at Hong Kong banks until the end of 2010, following moves by other countries amid concern about the viability of banks globally as the global financial crisis worsened after the collapse of US investment bank Lehman Brothers. Hong Kong banks have weathered the crisis relatively well as they had little exposure to sub-prime mortgage.

Before the introduction of the 100% deposit guarantee, the HKMA protected deposits up to HK$100,000 under a deposit protection board scheme.

The HKMA said it was working with Malaysia and Singapore to arrange a coordinated exit from full-deposit guarantee schemes in the three jurisdictions.

On the opposite side of the coin, Hong Kong is a new target of US prosecutors pursuing a global campaign against evaders of federal taxes, spurred by data acquired in their crackdown on Swiss banks.

Prosecutors are trying to determine what role financial professionals in Hong Kong play in tax evasion, according to people familiar with the matter. They are examining how much taxable money was moved to the former British colony, whether accounts were based there in name only and what banks were involved, the people said.

The push follows the government's success in penetrating Swiss bank secrecy and learning from insiders how UBS AG helped Americans evade taxes. UBS, the largest Swiss bank by assets, avoided prosecution by agreeing in February to pay $780 million and disclose account data on 250 clients. In August, it agreed to supply information on another 4,450.

The IRS is analyzing a trove of information from more than 7,500 taxpayers who voluntarily disclosed their offshore accounts this year to avoid prosecution. To qualify, clients had to disclose everyone who handled their money overseas and everywhere it went.

"We're going to be scouring the 7,500 disclosures to identify financial institutions, advisers and others" who helped taxpayers cheat on taxes, IRS Commissioner Douglas Shulman said Oct. 14.

He said the IRS is hiring 800 people in the next year and increasing staff in eight overseas offices, including Hong Kong. It also will open offices in Beijing, Sydney and Panama City.

While Hong Kong has strict anti-money laundering measures, it is easy to set up nominee and trust accounts there that obscure the ownership and control of assets, according to the Financial Action Task Force, an inter-governmental body.

"The availability of corporate services and the relative ease with which shell companies can be purchased contribute to the risk of Hong Kong being used for structuring of the proceeds of financial crime, corruption, tax evasion and smuggling," according to a June 2008 report by the task force, which works to combat money laundering.

Elsewhere, on Wednesday the European Commission set deadlines for some of its member countries to bring down budget deficit below the 3% ceiling.

Austria, the Czech Republic, Germany, Slovakia, Slovenia, the Netherlands and Portugal are asked to reduce budget deficit by 2013. The deadline for Belgium and Italy, which are likely to have a deficit above 3% in 2009, is 2012. The Commission gave time till 2013 to France, 2014 for Ireland and financial year 2014/15 for the UK.

The Commission also examined the action taken by five countries - France, Greece, Ireland, Spain and the UK. It concluded that these countries except Greece have taken effective action to reduce their budget deficits.

Economic and Monetary Affairs Commissioner Joaquín Almunia said cutting the deficits, widened during the economic crisis, is necessary to prevent a rise in long-term interest rates that would raise the debt servicing costs.

The Commission assessed that Austria, Germany and the Netherlands have scope to continue with stimulus measures in 2010, thanks to relatively good starting public finance position. In the case of the Czech Republic, Slovakia and Slovenia , the Commission said authorities should implement the deficit reducing measures in 2010 as planned in the draft budget laws. It urged the Italian government to implement the budgetary measures in 2010 as planned in the three-year fiscal package.

The Commission's autumn economic forecasts show that the average budgetary position in the EU has gone from negative 0.8% of GDP in 2007, the best position in 30 years, to negative 2.3% in 2008, the year when the financial crisis turned into a full-blown economic crisis. That figure is expected to treble to negative 6.9% this year and to increase further to negative 7.5% in 2010, which will remain largely a stimulus year on account of the recovery being fragile. "Public debt is set to increase by more than 20 percentage points of GDP in the same period, and to continue rising even after the deficits start coming down," the Commission said in a statement.

In the US, The Federal Deposit Insurance Corp. has seized two San Francisco banks in recent weeks and federal regulators have four other Bay Area banks under scrutiny, as the region loses what had been its relative immunity from an epidemic of failures.

Two weeks ago Friday, the FDIC closed the 14-branch Pacific National Bank and reopened it the next day under the ownership of US Bank.

Last Friday, the FDIC closed the 63 US branches of United Commercial Bank, which was taken over and reopened by East West Bancorp of Los Angeles.

United Commercial was the 120th (ONE HUNDRED AND TWENTIETH) bank seized by federal regulators so far this year. Last November, it received $298.7 million under the federal government's Troubled Asset Relief Program.

A spokeswoman for East West Bank said the FDIC has written off United Commercial's TARP commitment. My question here, is that if the FDIC has done that for the other 119 banks, exactly how much money does the FDIC have?

On to those numbers on the boards for the week that was: