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UPDATE 1-South African rand extends losses after c.bank rate cut

* Rand down second day

* Weekly losses over 1.1 pct

* Bourse stronger on weaker rand (Updates to reflect afternoon trading, adds trader comment)

JOHANNESBURG, March 29 (Reuters) - The South African rand fell further on Thursday, a day after the central bank cut its main lending rate and said the currency was overvalued.

Trading volumes were low ahead of the Easter public holiday weekend, over which South African markets will be closed.

At 1503 GMT, the rand traded down 0.7 percent at 11.8422 per dollar.

That built on losses of 0.9 percent a day earlier and put the South African currency on course for weekly losses of more than 1.1 percent.

Lower domestic interest rates dent the appeal of South African assets for carry trade, where foreign investors borrow money cheaply in developed markets and seek greater returns in higher-yielding emerging economies.

RMB analysts said South African markets were likely to reflect global trends unless local economic data surprised significantly on the upside. Worries over the country's debt had eased after Moody's affirmed South Africa's last investment-grade credit rating late last week, they noted.

Government bonds also weakened on Thursday, with the yield on the benchmark 2026 government bond rising by 10 basis points to 8.010 percent.

The All-share index recovered from the previous day, rising 1.43 percent to 55,548 points, partly as a result of the weaker rand. The Top 40 index was up 1.53 percent to 48, 874 points.

"The local market has also had time to digest the 25 basis point rate cut. Globally, there has been an easing of worries about the trade war too," said Greg Katzenellenbogen, director at Sanlam private wealth.

South Africa's Gold Fields was one of the losers, down 1.66 percent to 48.09 rand. The bullion miner announced plans to buy a near 50 percent share of Asanko Gold Inc's AKG.TO Ghana subsidiary and take a stake in the Canadian miner in a $202.6 million deal.

"This is a low return (asset) and I think investors are hungry for returns in the form of dividends," said portfolio manager at Gryphon Asset Management Casparus Treurnicht.

"Unless Gold Fields have some plan to materially increase returns from the Asanko operation I do not see this as a breakthrough transaction." (Reporting by Alexander Winning and Patricia Aruo)