Monetary Policy Variables and the Performance of Stock Exchange Market in Nigeria

Bosco; Itoro Ekpenyong; Nwankwo; Godgift Anyamaobi.

doi:10.56201/ijssmr.vol.12no5.2026.pg314.326

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Monetary Policy Variables and the Performance of Stock Exchange Market in Nigeria

Bosco, Itoro Ekpenyong and Nwankwo, Godgift Anyamaobi.

Abstract

This study empirically determined the effect of monetary policy variables on the performance of stock exchange market in Nigeria. The study covered the period from 1985 to 2021. The study proxied monetary policy variables by monetary policy rate, money supply, lending rate and treasury bill rate while the performance of stock exchange market was proxied by stock market capitalization. The time series data used for the study were sourced/extracted from Central Bank of Nigeria statistical bulletin. The techniques of data analysis adopted include: descriptive statistical technique, ADF unit root test, and ARDL approach. The result of the study showed that there is a negative and significant relationship between monetary policy rate and stock market capitalization, there is a positive and significant relationship between money supply and stock market capitalization, there is a negative and significant relationship between lending rate and stock market capitalization while there is a positive and significant relationship between treasury bill rate and stock market capitalization in Nigeria. Based on the findings, the study concluded that monetary policy variables have significant effect on the performance of stock exchange market in Nigeria. It was recommended among others that the Central Bank of Nigeria should be cautious and properly consider the prevailing macroeconomic condition in monetary policy decision, especially with regard to lending rate because of its potential in fuelling or deterring inflation which negatively affects the performance of stock market

References

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Monetary Policy Variables and the Performance of Stock Exchange Market in Nigeria

Abstract

References

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