FOREIGN EXCHANGE RESERVE AND STOCK MARKET CAPITALIZATION IN NIGERIA

The study examined foreign exchange reserve and stock market capitalization in Nigeria, while the specific objectives are to examine if foreign exchange reserve has significant impact on stock market capitalization, determine if exchange rate has significant impact on stock market capitalization, investigate the significant impact of interest rate on stock market capitalization and determine if money supply has significant impact on stock market capitalization. The study adopted the expost facto research design, uses the secondary data sourced from Central Bank of Nigeria statistical bulletin and employed the ordinary least square (OLS) as method of data analysis. The findings revealed that foreign exchange reserve has no significant impact on stock market capitalization, exchange rate has significant impact on stock market capitalization, interest rate has no significant impact on stock market capitalization and money supply has significant impact on stock market capitalization. Among other recommendations the study recommended that the Nigerian government and central bank should focus on implementing effective policies and strategies to enhance the management of foreign exchange reserves. This includes diversifying the reserves portfolio, monitoring exchange rate movements, and adopting prudent risk management practices. Strengthening reserves management can provide stability and confidence in the foreign exchange market, which can positively impact market capitalization.