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Exchange Rate Policy And Falling Crude Oil Prices: Effect On The Nigerian Stock Market, Terfa W. Abraham
Exchange Rate Policy And Falling Crude Oil Prices: Effect On The Nigerian Stock Market, Terfa W. Abraham
CBN Journal of Applied Statistics (JAS)
This paper examines the effect of crude oil price movement on the Nigerian stock market and the role of exchange rate as a plausible countercyclical policy tool. Daily data on All Share Index of the Nigerian stock market, crude oil prices and exchange rate, were collected for two periods: 2008-2009 and 2012-2015. Results from the Autoregressive Distributed Lag (ADL) model show that oil prices are positively related with the performance of the Nigerian stock market thus would drag the market down in times of turmoil. Howbeit, devaluation of the naira is found to be effective in cushioning the effect of …