MOSCOW, April 18 (Reuters) - Russia's central bank should not sacrifice its main policy goals, such as lower inflation, for the sake of higher economic growth, the bank's designated chairwoman, Elvira Nabiullina, told reporters in remarks cleared for publication on Thursday.
'I am against boosting economic growth at the expense of ... inflation,' said Nabiullina, a 49-year-old former economy minister who will replace current central bank head Sergei Ignatyev in June.
Nabiullina also said Russia's economy is currently performing below its potential level of 3 to 4 percent growth, with the Economy Ministry estimating gross domestic product grew by an annual 1.1 percent in the first quarter.
The central bank used the argument that 'aggregate output remains close to its potential level' for months to justify holding rates, but left the phrase out of its April statement. Still, it left key policy rates unchanged.
German Gref, chief executive of Russia's largest bank Sberbank, who has been advocating monetary easing for months, said on Thursday that he expects rates to be cut.
Bankers have argued that softening of monetary policy would spur lending to the industrial part of the economy and increase its output.
'I expect a rate cut, but not related with the arrival of a new head,' Gref said.
Nabiullina 'has said that she will not implement a radical (policy) reversal... I expect a rate cut as the decline of inflation towards 6.0-6.5 percent for the year is fully realistic,' he said, adding that a rate cut before June is possible.
Headline inflation came to 7.1 percent in mid-April, according to an official estimate, rising slightly from 7.0 percent at the end of March.
The central bank has a target of bringing annual inflation below 6 percent by the end of the year. The central bank's next policy meeting is scheduled for the first half of May.
(Reporting by Darya Korsunskaya and Oksana Kobzeva; Writing by Lidia Kelly and Maya Dyakina, editing by Jason Bush) Keywords: RUSSIA CBANK/RATES
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