EXCHANGE RATE MANAGEMENT AND CAPITAL MARKET PERFORMANCE IN NIGERIA

Authors: Adedoyin Ibosiola & Isibor Areghan (PhD)

ABSTRACT

This study to examine the impact of exchange rate management on capital market performance in Nigeria.   The study used statistical records for years 2004-2023 as secondary data. Ordinary Least Square was used to estimate the data collected during the period of this study. The variables used include exchange rate, market capitalization, inflation rate, and foreign direct investment. From the analysis of the study, it is observed that exchange rate has significant effect on market capitalization since p-value of 0.0000 was less than 5% level of significance, exchange rate has significant effect on inflation rate since p-value of 0.0334 was less than 5% level of significance. Exchange rate has significant effect on foreign direct investment since p-value of 0.0128 was less than 5% level of significance Based on the above findings, the study recommended that maintain a stable exchange rate to boost investor confidence and enhance market capitalization. Effective exchange rate management can reduce volatility and support market growth.

Keywords: Market Capitalization, Exchange Rate, Inflation Rate, Capital Market

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