FX.co ★ New government and Premier serve as tools for consolidating autocracy

In any civilized country, unexpected resignation of the whole government and appointment of a new prime minister has an instant effect on the national currency and domestic stock indices. Domestic financial markets are vulnerable to any cabinet reshuffle which triggers a severe downturn in most cases. However, Russia seems to be an exception. Resignation of any key figure or even the whole government can hardly challenge an autocracy with strongman Putin at the helm. This thing is obvious to market participants, foreign analysts, and even Russian nationals. Most people in Russia have got used to such political stability, though someone is fed up with it. No wonder, the market gave no response to a new name of Russia’s Premier for the simple reason. A new cabinet and a new head of the government do not entail any policy revision, but mean consolidation of power. Oddly enough, the Russian ruble rose marginally after President Putin had made the announcement at his annual state of the nation address. The Russian leader nominated tax service chief Mikhail Mishustin as Prime Minister and the Duma promptly approved his appointment.