After a week in which share prices have tumbled, the battered RTS index finished up 8.47% at 209.7, after rising 10% on Tuesday. The rouble also strengthened, up 3 kopecks to $6.151, helped by government overnight interest rates that reached 150%.

Russian finance minister Mikhail Zadornov said that the government was not seeking additional aid from the G7. "We have decided as a matter of principle not to do this," he told journalists. Deputy finance ministers from the major industrial countries are due to meet early next week to discuss the Russian financial crisis.

And in another sign of confidence, Prime Minister Sergei Kiriyenko went ahead with his official visit to France, while President Yeltsin is scheduled to visit Germany in the next few days.

Dealers have been moving back into government bonds

The growing optimism was reflected on the government bond market, where the short-term bills found ready takers in the market. Last week, 40% of government bonds went unsold as investors feared a sudden devaluation of the rouble. This time yields dropped on seven-day tranches from 50% to 39% annualised, which also boosted shares.

The Russian government appears confident that funds from the IMF and the private banking sector will flow into the country. The IMF is scheduled to release the next $670m payment of its $9.2bn aid package to Russia later this month.