The Reserve Bank's move to cut interest rates signals that its Governor Don Brash thinks the export boom won't last, National's Finance spokesman Bill English said today.

"Dr Brash has decided there is a risk that deteriorating world markets could slow down New Zealand growth, and he has moved to take out an insurance policy.

"This represents a turning point for the economy, an early warning that the economy will fall back to lower long-term levels of growth.

"His concern about our export future is signalled in the Bank's forecast for the current account deficit. The forecasts show that despite ideal export conditions, our current account deficit will peak at 4% of GDP and start getting worse again soon.

"This is predicated on a view of slowing export volume growth and a pull-back in export prices over the next two years.

"The Monetary Policy Statement shows that even with all the planets lining up for the export sector, the Reserve Bank can see that there has not been enough of a structural change to generate sustained improvement in the current account deficit.

"Traditionally a lower dollar has left New Zealand no better off, and this cycle looks like it won't be any different," Bill English said.

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