Stock Market Performance and Inflation Rate in Nigeria

Abstract

The study examines the effect of stock market performance on inflation rate in Nigeria; for the period (1998-2025). Secondary data were used and collected from the Central Bank of Nigeria Statistical Bulletin, 2025. Hypotheses were formulated and tested using Ordinary Least Square (OLS). The study reveals a positive significant effect of market capitalization on inflation rate in Nigeria. All-share-Index has a negative significant effect on inflation rate in Nigeria. Total new issues have a positive significant effect on inflation rate in Nigeria. The coefficient of determination indicates that about 64% of the variations in inflation rate can be explain by changes in capital market variables (MCP, ASI, TNI) in Nigeria. The study concludes that stock market performance has a positive significant on inflation rate in Nigeria. The study recommends that market forces should be allowed to operate without any hindrance because interference in security pricing is inimical to the performance of the stock market performance the inflation rate in Nigeria. The determination of stock prices should be deregulated for the purpose of achieving a sustained effort to stimulate productivity in the private sector of the economy. For any meaningful private sector growth, government should ensure that polices are consistent over time, as policy inconsistency in the past had led to closure of many industries in the economy.