JOHANNESBURG (Reuters) - South Africa's rand weakened further against the dollar on Friday after sliding more than 2 percent overnight, weighed down by weak local economic fundamentals and poor export receipts.
The rand was 0.6 percent softer at 9.08 by 1610 GMT compared with the previous day's close at 9.0250, although it pulled back from Friday's session trough of 9.1138.
Government bonds were also heavily sold, with the yield on the 2026 paper jumping 9 basis points on the day to 7.395 percent. The shorter-dated 2015 bond gained 7 basis points to 5.36 percent.
Demand for South African assets has softened after Finance Minister Pravin Gordhan on Wednesday gave wider budget deficit forecasts for the next three years than announced last October and also cut GDP growth forecasts.
Further bad news came from the national revenue service on Thursday, which reported the trade deficit widened to a record 24.5 billion rand in January from 2.7 billion rand in December.
"It is very clear that South Africa's external position is weakening," Danske Bank analyst Lars Christensen said in a note, pointing out that Africa's biggest economy has, alongside Turkey, the largest current account deficit among leading emerging markets.
"We maintain our bearish view on dollar/rand on all forecast horizons at 9.10, 9.18 and 9.38 in three, six and 12 months respectively," he added.
The rand has already shed more than 7 percent of its value against the dollar in the first two months of the year, extending last year's heavy losses, when investors rattled by violent labour strike in the key mine sector dumped South African assets.
The retail price of petrol will jump by nearly 7 percent a litre next Wednesday, while the wholesale diesel price will increase by 5 percent, the energy department said on Friday, citing in large part the weaker rand.
South Africa is a net importer of oil and adjusts its fuel price each month to account for changes in the rand exchange rate, the international oil price and government levies.