Interest Rate, Foreign Exchange Rate, and Stock Market Development in Nigeria
This research investigated the effect of interest rate and foreign exchange rate on stock market development in Nigeria. This research was centered on two research problems. First, it was whether interest rate had a significant effect on stock market development in Nigeria. Second, it was whether fo...
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Bina Nusantara University
2018-12-01
|
| Series: | Binus Business Review |
| Subjects: | |
| Online Access: | https://journal.binus.ac.id/index.php/BBR/article/view/4941 |
| _version_ | 1827848187938865152 |
|---|---|
| author | Edward Adedoyin Adebowale Akindele Iyiola Akosile |
| author_facet | Edward Adedoyin Adebowale Akindele Iyiola Akosile |
| author_sort | Edward Adedoyin Adebowale |
| collection | DOAJ |
| description | This research investigated the effect of interest rate and foreign exchange rate on stock market development in Nigeria. This research was centered on two research problems. First, it was whether interest rate had a significant effect on stock market development in Nigeria. Second, it was whether foreign exchange rate had a significant impact on stock market development in Nigeria. The scope of the research covered the period from 1981 to 2017. Data for this period were chosen because it covered pre and post-liberalization periods of Nigerian financial system. This research made use of ex post facto research design. Secondary data were sourced from Nigerian Stock Exchange reports, Central Bank of Nigeria statistical bulletins, and National Bureau of Statistics publications. Data were collected on Stock Market Capitalization (SMC), Prime Lending Rate (PLR) and Real Exchange Rate (RER) (Nigerian Naira in relation to American Dollars of the United States). Data analysis was carried out with Ordinary Least Squares (OLS) and Cochrane-Orcutt Iterative techniques. The findings reveal that interest rate has a significant negative effect, and foreign exchange rate has a significant positive effect on Nigerian stock market development during the period covered. It is suggested that monetary authorities should strive to formulate policies that will make interest and foreign exchange rates stable, competitive, and at a level that will stimulate the investment of funds in the stock market. |
| first_indexed | 2024-03-12T09:43:24Z |
| format | Article |
| id | doaj.art-9ffcc981fa6644398fab4849905633fb |
| institution | Directory Open Access Journal |
| issn | 2087-1228 2476-9053 |
| language | English |
| last_indexed | 2024-03-12T09:43:24Z |
| publishDate | 2018-12-01 |
| publisher | Bina Nusantara University |
| record_format | Article |
| series | Binus Business Review |
| spelling | doaj.art-9ffcc981fa6644398fab4849905633fb2023-09-02T13:06:32ZengBina Nusantara UniversityBinus Business Review2087-12282476-90532018-12-019324725310.21512/bbr.v9i3.49413416Interest Rate, Foreign Exchange Rate, and Stock Market Development in NigeriaEdward Adedoyin Adebowale0Akindele Iyiola Akosile1School of Business and Management Studies, Moshood Abiola Polytechnic,College of Management Sciences, Joseph Ayo Babalola University,This research investigated the effect of interest rate and foreign exchange rate on stock market development in Nigeria. This research was centered on two research problems. First, it was whether interest rate had a significant effect on stock market development in Nigeria. Second, it was whether foreign exchange rate had a significant impact on stock market development in Nigeria. The scope of the research covered the period from 1981 to 2017. Data for this period were chosen because it covered pre and post-liberalization periods of Nigerian financial system. This research made use of ex post facto research design. Secondary data were sourced from Nigerian Stock Exchange reports, Central Bank of Nigeria statistical bulletins, and National Bureau of Statistics publications. Data were collected on Stock Market Capitalization (SMC), Prime Lending Rate (PLR) and Real Exchange Rate (RER) (Nigerian Naira in relation to American Dollars of the United States). Data analysis was carried out with Ordinary Least Squares (OLS) and Cochrane-Orcutt Iterative techniques. The findings reveal that interest rate has a significant negative effect, and foreign exchange rate has a significant positive effect on Nigerian stock market development during the period covered. It is suggested that monetary authorities should strive to formulate policies that will make interest and foreign exchange rates stable, competitive, and at a level that will stimulate the investment of funds in the stock market.https://journal.binus.ac.id/index.php/BBR/article/view/4941interest rate, foreign exchange rate, stock market development, post-liberalization, capitalization |
| spellingShingle | Edward Adedoyin Adebowale Akindele Iyiola Akosile Interest Rate, Foreign Exchange Rate, and Stock Market Development in Nigeria Binus Business Review interest rate, foreign exchange rate, stock market development, post-liberalization, capitalization |
| title | Interest Rate, Foreign Exchange Rate, and Stock Market Development in Nigeria |
| title_full | Interest Rate, Foreign Exchange Rate, and Stock Market Development in Nigeria |
| title_fullStr | Interest Rate, Foreign Exchange Rate, and Stock Market Development in Nigeria |
| title_full_unstemmed | Interest Rate, Foreign Exchange Rate, and Stock Market Development in Nigeria |
| title_short | Interest Rate, Foreign Exchange Rate, and Stock Market Development in Nigeria |
| title_sort | interest rate foreign exchange rate and stock market development in nigeria |
| topic | interest rate, foreign exchange rate, stock market development, post-liberalization, capitalization |
| url | https://journal.binus.ac.id/index.php/BBR/article/view/4941 |
| work_keys_str_mv | AT edwardadedoyinadebowale interestrateforeignexchangerateandstockmarketdevelopmentinnigeria AT akindeleiyiolaakosile interestrateforeignexchangerateandstockmarketdevelopmentinnigeria |