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Impact of Foreign Exchange Reserves on Nigerian Stock Market

Author

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  • Olayinka Olufisayo Akinlo

Abstract

This paper investigates the relationship between foreign exchange reserves and stock market development in Nigeria over the period 1981-2011. We use a multivariate framework incorporating an interest rate variable. The results show that a long run relationship exists among exchange rate reserves, interest rates and stock market development. Foreign reserves have a positive effect on stock market growth. Bidirectional causality exists between interest rates and stock market growth. Finally, a bidirectional relationship exists between interest rates and foreign reserves.

Suggested Citation

  • Olayinka Olufisayo Akinlo, 2015. "Impact of Foreign Exchange Reserves on Nigerian Stock Market," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 9(2), pages 69-76.
    • Handle: RePEc:ibf:ijbfre:v:9:y:2015:i:2:p:69-76
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    References listed on IDEAS

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    5. Mohammed Nishat & Rozina Shaheen, 2004. "Macroeconomic Factors and Pakistani Equity Market," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(4), pages 619-637.
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    Cited by:

    1. DITIMI Amassoma & IFEOLUWA Bolarinwa, 2018. "A Time Series Analysis Of The Nexus Between Macroeconomic Fundamentals And Stock Prices In Nigeria," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 13(2), pages 69-91, August.

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    More about this item

    Keywords

    Foreign Exchange Reserves; Stock Market;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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