Effect of Exchange Rate on Stock Price Movement in Nigeria

Theories of exchange rate in developing economies suggest that between and stock price movement, a positive relationship exists. In Nigeria, depreciation local currency to many seems not have brought about the expected increase export or output industrial sector, let alone firms’ prices. This study was therefore set out investigate effect has on movement Nigeria direction causality two. Data rate, interest inflation gross domestic product market index were used for analyses. Auto Regressive Distributed Lag (ARDL) test assess possibility existence long run association movement. Results established significant (F:12.89 >Io & I1Bound, P-value < 0.05 LEXR, LGDP LINF). However, negative coefficients regressors; especially contrary existing theories benefits depreciating rates. means fully reaped from devaluation her over years. A unidirectional also discovered. Causation flows (P-value LEXR). further suggests most firms lack absorption capacity transform accruing gains increased productivity exports.