Australia Rate on Hold, February Trade Deficit on Delayed Coal Shipments

Marcus Jacob
05 Apr, 2011
New York City

Australian stocks edged higher after the Reserve Bank of Australia left rates on hold for the fifth month in a row. Australia recorded trade deficit of $205 million in February as coal and iron ore shipments were delayed. The Australian dollar closed at $1.03.

[R]5:00 PM Sydney – Australian stocks edged higher after the Reserve Bank of Australia left rates on hold for the fifth month in a row. Australia recorded trade deficit of $205 million in February as coal and iron ore shipments were delayed. The Australian dollar closed at $1.03.[/R]

Australian stocks advanced after central bank left rates unchanged for the fifth month in a row and Australia recorded a trade deficit in February.

The ASX 200 index increased 13.30 to 4,900.10 and the All Ordinaries Index increased 13.9 to 4,998.60.

The Australian dollar declined US$1.032 and crude oil declined 36 cents to US$108.11 a barrel.

RBA Leaves Rate on Hold

Reserve Bank of Australia left its key lending rate at 4.75% for the fifth month in a row as the nation enjoys highest trade terms in sixty years.

The RBA governor Glenn Stevens noted that economic recovery is slow after Queensland floods and that has allowed policy makers to be on the sidelines longer.

The expectations of higher interest rates were widely anticipated as commodities prices hover near 30-month high.

Governor Stevens also said that impact of earthquake in Japan is going to be limited on Australian economy and high exchange rate is helping economic conditions to keep “inflation moderate.”

February Trade Deficit

Australia recorded trade deficit in February of $205 million compared to a surplus of $1.43 billion in January and from $1.8 billion in the month a year ago.

The latest data from the Australian Bureau of Statistics said imports increased 5% and exports declined 2%.

The exports of coal, gold and iron ore were hit after Queensland suffered one of its worst disasters. Thermal coal exports declined 18% and volatile gold exports plunged 46% form January.

Exports in the month declined to $24 billion from $24.2 billion a year ago and $24.11 billion in January. Imports increased 5% to $23 billion from $21.9 billion in January and $22.73 billion in the month a year ago.

March data is expected to show the impact of the triple disaster in Japan on the trade between Australia and Japan.

Stock Movers

BHP Billiton increased 67 cents to $47.55 and Rio Tinto increased 66 cents to $86.16.

Extract Resources increased 25 cents to $8.23 after the uranium miner reported positive results

Equinox Minerals increased 1% $7.43 after the company postponed the shareholder meeting to discuss the Lundin Mining takeover and a proposal from Minmetals Resources.

AMP increased 4 cents to $5.64 after the company said its asset management division raised $331 million and secured institutional investors for its infrastructure fund.

Most banks closed higher. National Australia Bank increased 1cent to $26.06 and ANZ added 8 cents to $23.94.