Australia’s $35-a-Ton Iron-Ore Angst Adds to RBA Easing Pressure
This article is for subscribers only.
The prospect that an ever-bigger plunge in iron-ore prices will wreck Australia’s budget is adding to pressure for the central bank to cut interest rates further.
The country’s biggest export has plummeted 58 percent to $49 a ton over the past year, taking an ax to federal revenue. Treasurer Joe Hockey said in an interview with the Australian Financial Review that $35 is a level he’s contemplating for the budget he hands down next month. Citigroup Inc. sees prices averaging in the $30s in the second half of 2015. Such levels could mean a blowout in deficits Hockey had hoped to rein in.