By Stella Mapenzauswa JOHANNESBURG (Reuters) - South Africa's trade shortfall widened in October, data showed on Friday, underlining warnings from the central bank that persistent current account and fiscal deficits along with weak economic growth would make policy decisions harder. The trade report sent the rand to its lowest level in a week against the dollar, although it was offset by an energy department announcement that fuel prices would drop from next week because of falling global oil prices. South African exports fell nearly 2 percent in October and imports soared nearly 18 percent, leading to a record trade gap of 21.33 billion rand ($1.9 billion), the revenue service said. The data points to continued pressure on the current account, an longstanding Achilles heel for the rand that has earned it a place among the "fragile five" currencies which tend to take the brunt of emerging-market sell-offs. In a speech delivered at a banking conference in Johannesburg, Reserve Bank Deputy Governor Daniel Mminele said global conditions had become "less hospitable" to countries with large external funding requirements. He was alluding to growing expectations the United States will start raising interest rates soon, reducing investor appetite for high-yielding but riskier emerging-market assets. South Africa's nagging current account deficit has historically been funded by foreign portfolio inflows. "Against the background of South Africa’s elevated current account deficit, which is expected to only correct slowly, the risk of abrupt swings in capital flows cannot be under-estimated," Mminele said. "If this is not challenging enough, we are also faced with stagflation – that is, low growth and high inflation." The central bank, which targets a CPI inflation rate of 3 to 6 percent, raised interest rates by 75 basis points to 5.75 percent this year, signaling a tightening cycle even as Africa's most advanced economy struggles to grow after a 2009 recession. Future rate increases would depend on how inflation expectations develop, the timing and speed of normalisation of monetary policy in the U.S. and the state of the domestic economy, Mminele said. The bank's Monetary Policy Committee will next meet in January to decide on interest rates.