Foreign Exchange Rate Dynamics and the Nigerian Capital Market Performance
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Date
2019
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Departments of Accounting & Finance and Business Administration, Fountain University
Abstract
A stable foreign exchange and a well-regulated fiscal policy are crucial to a healthy and viable capital market performance of any nation. This study seeks to investigate the effects of foreign exchange rates dynamics on the Nigerian capital market performance. Secondary data sourced from the Nigerian stock exchange and the Central Bank of Nigeria Annual reports spanning from 1986 to 2015. The data obtained were subjected to both normality and co-integration tests. The study employed Vector Error Correction Model to investigate the impact of foreign exchange on the Nigerian capital market performance using market capitalization as the dependent variable and the official foreign exchange rate as the independent variable.
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Keywords
Capitalization, exchange rate dynamics, interest rate, inflation rate and GDP