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The Monetary Policy Rate of the Central Bank of Nigeria (CBN) and the Nigerian Stock Market: A Structural Var Analysis

This study examines the dynamic relationship between stock market performance and the CBN monetary policy rate between the period of 1973-2012. We utilized the “all share price index†in the Nigerian stock exchange as a measure of stock market performance and the official rate of interest at which the CBN lends money to money deposit banks in the country as a measure of the monetary policy rate. The author estimated the SVAR model. The major finding in the study is that stock market performance is negatively associated with the CBN monetary policy rate in Nigeria. In effect, if the CBN mone…

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