Ruble strong, stocks surge after Russian government reshuffle

The appointment of a new prime minister has boosted the Russian stock market to new record highs on Friday, with the national currency holding on to gains reached over the past 18 months.

The ruble continued gaining against major currencies on Friday, after accelerating growth on the news of the appointment of Mikhail Mishustin as Russia's new prime minister earlier in the week.

It was up 0.2 percent against the US 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.

Analysts credit a positive market reaction to the changes in the Russian government."The government's likely focus on investment should support yields and the ruble's carry attractiveness," Sébastien Barbé, 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.

READ MORE: Russia among Europe’s top performing stock markets in 2019

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, where he proposed a number of "fundamental changes" to the Russian Constitution.

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