UPDATE 2-S.Korea to ease FX borrowing in fresh flip-flop

(Recasts with analysts comments, details)

By Cheon Jong-woo and Yoo Choonsik

SEOUL, July 9 (Reuters) - South Korea plans to allow state firms to borrow more abroad, the latest in a series of policy flip-flops in recent months that analysts say could undermine already weakening confidence among investors toward the country.

A finance ministry official said the government was drawing up measures to spur dollar inflow, including allowing state firms to borrow more abroad, to help offset the mounting pressure on the won <KRW=> mainly from increasing costs of importing oil.

Analysts said the move and the recent turnabout in the country's foreign exchange policy pointed to a degree of naivety on the part of the young government which has been managing Asia's fourth-largest economy for only four months.

"I feel like I've been through four years in the past four months," said Kim Jae-eun, an economist at Hana Daetoo Securities. "They seem to feel obliged to do something on everything even when they can just let things go their own way."

A day after the finance ministry and the central bank said they were willing to sell part of the nearly $260 billion foreign currency reserves to prop up the won, dealers reported the authorities selling an estimated $2 billion on Tuesday.

The aggressive dollar sales marked a stark departure from the government's policy until as recently as March of keeping the won down so that exporters can sell their products easily or can earn more from selling their goods abroad.

The turnabout came after the government, launched only in late February, realised rising inflation led by commodities prices and aggravated by the cheaper won was a more urgent priority than boosting exports.