``I certainly think there are strong signals that the Russian economy is overheating,'' including surging imports and high inflation, Mates told reporters in Moscow today.
Mates said he expected the pace of inflation to be similar to last year's 11.9 percent, compared with the Economy Ministry's 9.5 estimate. Inflation accelerated to an annual 13.3 percent in March on high global food prices and oil revenue, the highest rate in over 2 1/2 years, according to the Federal Statistics Agency.
The central bank raised its key interest rates at the start of February, highlighting that it views inflation as a key threat. At the same time, the government has pledged to support lenders, after the collapse of the U.S. sub-prime mortgage market sparked a global credit crisis. The Finance Ministry is offering hundreds of billions of rubles to banks in temporary loans at weekly auctions, though demand at the first last week was low.
Inflation, which is seen by Mates as being a "symptom" of overheating, is encouraging Russians to spend their money rather than place it on deposit, deputy central bank chairman, Alexei Ulyukayev said on April 1.
``The population has chosen consumption over saving,'' Ulyukayev said.
Mates also recommended that Russia move towards a system of inflation targeting, leaving the exchange rate to move freely, and making interest rates a more important tool in the control price increases. Both the Russian central bank and the Finance Ministry have called for moving to a floating rate.
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