EXCHANGE RATE, MONEY SUPPLY AND THE NIGERIAN CAPITAL MARKET

ABSTRACT
The study is on the impact of exchange rate and money supply on Nigerian capital market within the period 2007 to 2021. The study adopted the fully modified least squares (FMOLS) econometric tool. The outcome of the study revealed that Exchange rate has a negative insignificant effect on market capitalization. Money supply has a positive significant effect on market capitalization. Lastly, Inflation rate has a positive insignificant effect on market capitalization.The study however recommends that The Securities and Exchange Group should work to expand the capitalization of the capital market by luring listings and expanding trading activity, taking into account the significance of the Nigerian capital market to economic development. While a suitable corporate governance framework should be put in place and enforced for the restoration of market trust, the issue of public enlightenment to stimulate investment and stock transactions should be given priority. Finally, to encourage investors to keep their investments, the Nigerian government should develop ways to increase investor trust. This can be accomplished by enacting investor protection regulatory regulations, which will undoubtedly motivate investors to keep making investments in sectors that produce high returns because they won't have to worry about losing their investable cash. If this continues, the number of listed securities and the market capitalization of the capital market will unquestionably rise, which will always result in a favorable index for Nigeria's growth.