Nov. 5 (Bloomberg) -- Australian exports rose in September by the most in almost a year, underpinning an economic rebound that prompted central bank Governor Glenn Stevens to lead the world in raising interest rates.

Exports jumped 5 percent from August, driven by increased shipments of coal and gold, the Bureau of Statistics said in Sydney today. The gain helped offset rising imports that widened the trade deficit to A$1.85 billion (A$1.68 billion), less than the A$2.15 billion estimate in a Bloomberg survey of analysts.

BHP Billiton Ltd. and Rio Tinto Group boosted iron ore production to a record in the third quarter to satisfy rebounding Chinese demand for steel. Central bank Governor Glenn Stevens will increase the benchmark interest rate Dec. 1 by a quarter percentage point for a third straight month to 3.75 percent, according to analysts surveyed by Bloomberg.

“This supports the long-standing theme from the Reserve Bank that export growth exceeds expectations given the global trade slowdown,” said Annette Beacher, an economist at TD Securities Ltd. in Singapore. “The odds still favor the central bank adding another quarter point” next month.

The Australian dollar traded at 90.79 U.S. cents at 1:04 p.m. in Sydney from 90.88 cents just before the report was released. The two-year government bond yield fell 2 basis points to 4.57 percent. A basis point is 0.01 percentage point.

Exports rose to A$20.2 billion in September, the biggest increase since October 2008, today’s report showed. Coal shipments gained 9 percent from August.

Gold Surges

Gold exports surged 64 percent. Demand from investors seeking the precious metal as an alternative asset pushed up prices for immediate delivery to a record high of A$1,097.72 an ounce yesterday.

Australian resources exporters are also benefiting from a rebound in China’s economy, which Governor Stevens this week described as “very strong.” China’s gross domestic product rose 8.9 percent in the third quarter from a year earlier, the fastest expansion in a year, a report showed Oct. 22.

Rio Tinto, the world’s third-largest mining company, said last month that iron-ore production climbed 12 percent to a record 47.5 million metric tons in the three months to Sept. 30. BHP Billiton, the world’s biggest miner, said its production of the steel making material also rose to a record.

Brisbane-based Macarthur Coal Ltd., the world’s biggest exporter of pulverized coal, last month reported a 22 percent gain in September quarter sales after demand from steelmakers rebounded.

Strong Demand

Demand “was right across the board,” Ian McAleese, executive manager of corporate development at Macarthur, said today in a telephone interview. “We see the demand still quite strong, we are still quite encouraged by what we see.”

Investment in mining in Australia will rebound to record levels of more than A$50 billion by fiscal 2013 and more than A$60 billion the following year, economic forecaster BIS Shrapnel said today.

Prices for commodities, as measured by the Reuters/Jefferies CRB Index of 19 commodities, have gained more than 20 percent this year.

Today’s report also showed imports rose 5 percent to A$22.1 billion in September, driven by a 2 percent increase in consumer goods shipments. Fuel imports surged 71 percent.

Higher imports add to evidence that Australia’s economy is growing faster and generating more jobs than Treasurer Wayne Swan and Prime Minister Kevin Rudd forecast six months ago, helped by A$20 billion in government cash handouts to consumers and Stevens’s record interest-rate cuts between September 2008 and April, when he slashed the benchmark rate by 4.25 percentage points to a half-century low of 3 percent.

Rate Pressure

Swan told an Australian Industry Group breakfast in Melbourne today that government stimulus will help the economy grow 1.5 percent in the 12 months to June 30, 2010. In May, he predicted a 0.5 percent contraction. GDP will accelerate to 2.75 percent the following fiscal year, he said. The economy grew 1 percent in the first six months of this year.

Signs of a surge in export earnings may boost pressure on Stevens, the first policy maker in the world to raise borrowing costs twice this year, to increase the overnight cash rate target again in December.

That could harm export earnings as rising interest rates push Australia’s currency toward parity with the U.S. dollar. Investors, attracted by the widening differential between the Reserve Bank’s benchmark rate and those of its global counterparts, have driven up the so-called Aussie by more than 30 percent in the past year, making it the best performing currency in the world. It touched 93.29 U.S. cents on Oct. 21.

Global Rates

Australia’s benchmark interest rate of 3.5 percent contrasts with the U.S. Federal Reserve’s rate of close to zero. The European Central Bank and Bank of England benchmark rates are at record lows of 1 percent and 0.5 percent respectively. The Bank of Japan’s rate is also close to zero.

Citigroup Inc., Calyon, Barclays Capital and National Australia Bank Ltd. forecast the Australian currency will trade at 1 U.S. dollar next year, implying an additional 10 percent gain. Hedge funds and other large traders last month had more bets than at any time since July 15, 2008, that the rally will continue, data from the Washington-based Commodity Futures Trading Commission show.

Fourteen of 17 economists surveyed by Bloomberg this week say Stevens will raise the rate again next month, the first time in history the central bank would have boosted borrowing costs at three successive meetings.

Governor Stevens is scheduled to give a speech at 7:55 p.m. in Melbourne today.

Support for Stevens

Investors are betting there is a 54 percent chance Stevens will raise the overnight cash rate target by a quarter point on Dec. 1, according to Bloomberg calculations based on interbank futures on the Sydney Futures Exchange at 1 p.m. The index was little changed from prior to today’s report.

Stevens, who said this week it would be “prudent” to raise interest rates “gradually” from an emergency low setting, was backed today by Gail Kelly, chief executive officer of Westpac Banking Corp.

“Having seen that consumer confidence has improved and that business confidence has improved and house prices have improved, I think it’s really important to move off those emergency lows, but in a modest and staged way,” she said. “So I actually think the approach that the Reserve Bank has taken has been appropriate.”

To contact the reporters for this story: Jacob Greber in Sydney at jgreber@bloomberg.netJesse Riseborough in Melbourne at jriseborough@bloomberg.net

Last Updated: November 4, 2009 21:45 EST