Ruble Firms, Russian Stocks Surge as Government Reshuffles

The Russian stock market seemed boosted on Friday by the appointment of a new prime minister, recording new highs, while the ruble held on to earlier gains, Reuters reported. 

After accelerating growth on the news of the appointment of Mikhail Mishustin as Russia’s new Prime Minister earlier in the week, the Russian currency was up 0.2 percent against the U.S. dollar at 61.39 rubles, while gaining slightly on the euro at 68.29 rubles.

The stock market posted solid gains at the beginning of the trading session. The dollar-denominated RTS index added more than one percent, reaching 1,635.58 points, while the ruble-based MOEX Russia Index rose to 3,189.24 points.

Having made steady gains since the beginning of December, the MOEX could reach as high as 3,180 points today, said Elena Shatilova of Alor Broker.

Analysts say the positive market reaction to the changes in the Russian government was expected.

“The government’s likely focus on investment should support yields and the ruble’s carry attractiveness,” Sebastien Barbe, head of emerging market research at Credit Agricole, told Yahoo Finance.

“Once the ruble stabilizes, investors may feel the timing is right to add to the ruble carry trade,” he added.

On Wednesday, Russian President Vladimir Putin signed a decree appointing Mikhail Mishustin as the country’s new prime minister. That followed the resignation of the Russian government, after Putin’s State of the Nation address earlier in the day. The Russian president proposed a number of “fundamental changes” to the Russian Constitution, leading to more power in the hands of parliament and the government, at the expense of the presidency.

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