Graphic: renjith krishnan

Johannesburg - The rand headed for a fifth straight weekly retreat on concern a sixfold increase in the trade deficit in 2012 will widen the current account gap and weigh on the currency.

The rand slipped as much as 0.3 percent, having earlier gained by the same amount, and traded less than 0.1 percent weaker at 8.9618 per dollar as of 10:20 am in Johannesburg, bringing its decline this week to 0.2 percent.

Yields on benchmark 10.5 percent bonds due December 2026 dropped one basis point, or 0.01 percentage point, to 7.34 percent.

South Africa posted a trade deficit of 117.7 billion rand ($13.1 billion) last year as slowing global growth damped demand for the nation’s exports.

The shortfall in the current account, the broadest measure of trade in goods and services, was unchanged at 6.4 percent of gross domestic product in the third quarter, contributing to the rand’s depreciation.

The currency has weakened 14 percent in the past 12 months.

“Unadjusted trade numbers point to a possible deterioration in the current account balance in the final quarter of the year,” Bruce Donald, a currency strategist at Standard Bank in Johannesburg, wrote in comments e-mailed to clients today.

“A large and stubborn current account deficit means that the currency remains vulnerable to any hiccup in capital flows.”

The rand pared its decline after reports showed manufacturing in China, the biggest buyer of South African raw materials, expanded in January, boosting prices of commodities including copper and nickel.

Metals and other commodities account for about 45 percent of South Africa’s exports.

The Purchasing Managers’ Index was 50.4 in January compared with 50.6 in December, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing as they more than tripled the number of companies surveyed.

A separate gauge from HSBC Holdings Plc and Markit Economics covering fewer businesses rose to a two-year high of 52.3 from 51.5. Readings above 50 indicate expansion. - Bloomberg