S.Korea won hits 2-mth high as intervention cited

(Updates to midday)

SEOUL, July 9 (Reuters) - The South Korean won <KRW=> hit its
strongest in over two months against the dollar on Wednesday,
breaking through the 1,000 level, as authorities were seen again
conducting massive dollar-selling intervention.

The foreign exchange authorities kept unloading dollars after
a foreign exchange official said the country's determination to
stabilise the currency market was stronger than the market
believed, traders said. [ID:nSEO72891]

The reported intervention and remark pushed up the won to as
high as 997.8 per dollar, its strongest since April 29. It was
the first time the won has risen above 1,000 versus the U.S.
currency since May 2.

The local currency slipped back to be quoted at 1,013.75/4.25
per dollar as of 0413 GMT, compared to Tuesday's domestic close
of 1,032.7 <KRW=KFTC>.

"The authorities seemed to keep dumping dollars with the
warning, until the won broke through the 1,000 (per dollar),"
said a foreign bank dealer said.

Wednesday's action followed $2 billion of dollar sales on
Tuesday, which is on top of an estimated $10 billion unloaded by
authorities since the beginning of the year.

Before the domestic financial markets opened, finance
ministry officials said the country planned to allow state firms
to borrow more abroad. [ID:nSEO349204]

South Korean shares rose 0.86 percent after U.S. Fed
Chairman Ben Bernanke said on Tuesday the U.S. central bank may
keep an emergency lending facility for big Wall Street firms open
longer than it initially intended, a signal the Fed is fearful of
shutting down a vital backstop. [ID:nN08304308]

But foreign investors sold a net 110.3 billion won worth of
stocks in Seoul's main exchange after dumping a combined net 6.3
trillion won during the previous 22 consecutive sessions.

0413 GMT 0010 GMT prev close
Won <KRW=> 1,013.75/4.25 1,026.3/6.9 1,032.7
Yen/won <JPYKRW=R> 9.4125/07 9.5542/97 9.6540/05
KOSPI 1,546.63 1,558.03 1,533.47
(Reporting by Cheon Jong-woo; Editing by Keiron Henderson)