THE INFLUENCE OF MONETARY POLICY ON THE NIGERIAN STOCK MARKET

THE INFLUENCE OF MONETARY POLICY ON THE NIGERIAN STOCK MARKET

Abstract

This have a look at evaluates the have an effect on of the financial coverage at the Nigeria Stock Market the use of decided on marketplace indices which span from 1986 to 2014. Augmented Dickey- Fuller (ADF) Test, graphs, more than one regressions and the diagnostic take a look at primarily based totally at the coefficient of determination (R2) have been followed for the analysis, and especially the have a look at used secondary data. Evidence well-knownshows that Interest price as a financial coverage device of the Federal Government of Nigeria has a bad have an effect on on all percentage index and overall marketplace capitalisation, and advantageous have an effect on on overall fee of securities traded, however none is massive. The financial coverage device of extensive cash deliver exerts a advantageous effect on all percentage index, overall marketplace capitalisation and overall fee of securities traded, however not one of the effect is massive at 1% level. Exchange price as a financial device of the Federal Government of Nigeria has a bad impact on all percentage index, overall marketplace capitalisation and overall fee of securities traded, however none is massive. Inflation price as a financial device of the Federal Government of Nigeria has a bad impact on all percentage index, overall marketplace capitalisation and overall fee of securities traded, however none is massive at 1% level. The dominance of insignificant bad courting among the inventory marketplace and the financial coverage variables suggests that there’s a disconnection among the financial coverage and the inventory marketplace. Hence, we propose that there have to be greater pressing want for the federal legislators to understand and deal with, thru their over-sight functions, the real motives why coverage makers do now no longer align the financial coverage price with the growing authorities expenditure; and Government have to support prudent financial coverage control so one can preserve exchange among regulations of reasonably-priced cash and tight cash in various stages to inspire increase withinside the inventory marketplace, and monetary increase even as maintaining inflation beneathneath manage of now no longer a couple of digit.