Conference Paper

EFFECT OF MONETARY POLICY INSTRUMENTS ON PERFORMANCE OF THE NIGERIAN EXCHANGE GROUP: A FOCUS ON INTEREST RATES AND REAL GDP GROWTH

ABSTRACT The Nigerian Exchange Group (NGX) is a key component of the financial system that provides a platform for mobilizing capital, facilitating investment, and promoting economic efficiency. However, its performance is significantly influenced by the monetary policy implemented by the Central Bank of Nigeria (CBN). This study therefore investigated effect of monetary policy on performance of the NGX. It specifically examined how interest rates and real GDP growth influenced All Shares Index and market capitalization of the NGX, for a period of 10 years. An Ex-post facto research design was adopted where secondary data were sourced from the CBN and NBS statistical bulletin. Data were analysed using both the descriptive and inferential analytical tool. The study revealed that both interest rates and real GDP growth have significant but negative effect on the All Shares Index and market capitalization of the Nigerian Exchange Group. It is therefore recommended that the CBN should reassess its monetary policy framework to minimize the adverse effects of interest rates on the stock market. Also, the government should enhance coordination between monetary and fiscal policies to promote economic growth and stability. Keywords: Monetary Policy, Performance, Interest Rate, Real GDP Growth, All Share Index, Market Capitalization.