AUSTRALIA’S trade account was in the red for the ninth straight month in December as falling commodity prices continued to crimp export earnings, highlighting one reason markets are wagering on a cut in interest rates this week.

    Tuesday’s data from the Australian Bureau of Statistics (ABS) showed a deficit of A$436 million (US$340 million) in December, bringing the shortfall for the second half of last year to A$6.5 billion.

    In the six months to December, earnings from iron ore alone were down A$8 billion even as shipment volumes swelled. Total exports to China shrank by over A$9 billion.

    The blow to company profits and national income adds to the case for more stimulus from the Reserve Bank of Australia (RBA), which holds its first policy meeting of the year Tuesday.

    Australia’s central bank Tuesday lowered its key interest rate by 25 basis points to a new record low of 2.25 percent, saying after a year-and-a-half on hold the cut was justified to spur growth.

    Analysts had suggested that a rate cut could see record house prices climb further as mortgages became more affordable, but the RBA said it was “working with other regulators to assess and contain economic risks that may arise from the housing market.”

    Pressure had been building on the central bank to cut interest rates as growth in the economy remained sluggish and as plunging prices for key commodities such as iron ore weighed on revenues.(SD-Agencies)