JOHANNESBURG, Dec 31 (Reuters) - South Africa's rand fell as much as 1.4 percent against the dollar on Tuesday and was on track for one of the steepest global losses for 2013, after a year in which labour strife weighed on investor sentiment.
The rand was trading at 10.5630 per dollar, down 1.37 percent from Monday's close at 10.4200.
It hit a session low of 10.5700 earlier in the day, the weakest since Dec. 6, according to Reuters data.
Currency moves have tended to be exaggerated in thin liquidity over the last couple of weeks, with most traders taking a break from the market as the year draws to a close.
The rand has fallen more than 24 percent against the dollar this year, weighed down mainly by negative sentiment over strikes that hit manufacturing and mining output in Africa's biggest economy.
This year's losses are the biggest annual decline for the rand since it shed nearly 40 percent of its value against the greenback in 2008.
The local unit has been rendered even more vulnerable by a budget deficit persisting around 5 percent of GDP since a 2009 recession and a wide current account shortfall which is hovering near 7 percent of GDP.
"This puts an added burden on the rand as it requires a consistently positive and high level of external financing to fund the deficit, making it particularly vulnerable to swings in foreign investor sentiment," Tradition Analytics said in a note.
On the debt market, the yield for the 2026 note, the benchmark for the secondary market, dipped 2 basis points to 8.245 percent while that for the 2015 paper inched up half a basis point to 6.16 percent.
Foreign flows into the debt market, traditionally key to financing the current account deficit, have plunged sharply in 2013 compared with the previous year.
Latest data from the JSE securities exchange shows that offshore investors have bought a net 33 billion rand in bonds this year, about a third of the 94 billion rand purchased in 2012. (Reporting by Stella Mapenzauswa Editing by Jeremy Gaunt)