MACROECONOMIC VARIABLES AND THE PERFORMANCE OF NIGERIAN CAPITAL MARKET

Abstract

This study examined the impact of macroeconomic variables on capital market performances in Nigeria covering the period 1990 to 2023. The study adopted the ex-post factor research design using Stock Exchange (NSE) and National Bureau of Statistics (NBS). The Non Liner Auto Regressive Distributed Log (NARDL) model was used for data analysis and Augmented Dickey-Fuller test was conducted to determine the stationarity of the time series variables. The NARDL result obtained shows that growth rate of GDP and exchange rate has a positive and significant impact on capital market performances in Nigeria, both in the short-run and in the long-run. On the other hand, interest rate has a negative and significant impact on capital market performance in the short-run and in the long run, but inflation rate has a positive but significant impact on capital market performances in Nigeria, in the short-run but in the long run inflation rate has insignificant impact on capital market performance in Nigeria. Based on these findings, the study therefore recommends among others that foreign exchange market should be regulated and properly monitored by the Federal Government/Central Bank of Nigeria through her exchange rate policies with a view to strengthen the local currency and reduce the impact of exchange rate fluctuation on capital market prices to enable the capital market to performed better.