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SEOUL — The won strengthened to a two-month high against the dollar Thursday in a strong signal that South Korean government measures to strengthen the currency are working — at least for now.

The won closed at 1,003 to the dollar, a dramatic reversal from last week’s rate of 1,050 to the dollar. It had lost 15 percent of its value against the greenback since November, when it took 898 won to buy a dollar at commercial rates.

Military banking rates and local commercial rates are usually 20 to 30 won lower, meaning that servicemembers can expect an exchange rate slightly under the 1,000-to-1 rate they have gained from for most of 2008.

However, there is some good news for servicemembers: If prices in the United States stay relatively stable, and the won maintains its current strength, servicemembers may see a cost of living allowance increase.

On Monday, the Bank of Korea and the Ministry of Strategy and Finance issued a joint statement, saying they would intervene in currency markets to stop the won’s fall.

The falling won, while considered good for exports, also has contributed to higher prices. South Korea imports all of its oil, and the weaker won has meant that businesses in the country have struggled to keep their prices in check.

In the past few days, the government has sold between $1 billion and $7 billion in foreign currency, according to local media reports.

Selling dollars and other foreign currency in exchange for won raises demand for the South Korean currency, which makes it more valuable.

As of last week, South Korea held $258 billion in foreign currency reserves, sixth most in the world, according to the Bank of Korea.

South Korean economists and bankers disagree over the long-term benefits of the government’s intervention to stabilize price inflation. However, many believe that at the very least, the perception that the bank is trying to strengthen the won will have an impact.

"If the government can succeed in controlling this speculative psychology, their intervention can be desirable and effective," said Song Jae-eun, an economist with the Korea Institute of Finance.

Stars and Stripes reporter Hwang Hae-rym contributed to this report.

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