Effect Of Monetary Policy On Stock Market Performance : Evidence From Nigeria Stock Exchange Market:- Chile, Blessing C

ABSTRACT The study investigated the effect of monetary' policy on stock market performance in Nigeria for the period 1981- 2018 with specific objectives namely; to examine the impact ofbroad money supply on stock market performance in Nigeria, to evaluate the impact oftreasury bill rate on stock market performance in Nigeria, to determine the impact ofLending Interest rate on stock market performance in Nigeria, to ascertain the impact ofconsumer price index on stock market performance in Nigeria and to examine the direction ofcausality between monetary policy rate andAll share index in Nigeria. The specified model was estimated using the Autoregressive Distributive lag Model to determine the level ofimpact that one variable has on the other. While E-views 10 statistical software was employed in computing the result, time series data were obtainedfrom World Bank national accounts data and OECD National Accounts data files and the study established that Lending interest rate had a positive relationship with all share index and also was statistically significant in the current year while Money supply had a negative relationship with ASI in the currentyear and in the previous lags i.e 1st, 2nd and 3rdyears lagperiods in the short run period but was found to have apositive relationship with All Share Index in the long run and was statistically significant at 5% level ofsignificance, Consumer Price Index (CNPI) had a negative relationship with LASI in the current and in the 1st years lagperiods andfinally, Treasury Bill Rate (TRBR) had a negative relationship and significant impact on ASI in the current yearperiod but was alsofound to have a positive and strong impact on ASI in the 1st lagperiod and the study recommended that Central bankers and stock market participants should be aware ofthe relationship between monetary policy and stock market performance in order to better understand the effects ofpolicy shifts. Monetaiy authorities in particular face the dilemma of whether to react to stock price movements, above and beyond the standard response to inflation and output developments.