EXCHANGE RATE FLUCTUATIONS AND ALL-SHARE INDEX IN NIGERIA (1990 – 2024)

This study investigated the effect of exchange rate fluctuations on capital market All-Share Index (ALSI) in Nigeria for the period 1990 to 2024. Naira-to-US Dollar exchange rate, Naira-to-British Pound exchange rate and Naira-to-Swiss Franc exchange rate were the exchange rates considered while the NGX All-Share Index (ALSI) stood as the dependent variable. Yearly time series data on these variables were sourced from Central Bank of Nigeria (CBN) statistical bulletin for 2023 and 2025(Q1). The natural log form of the data set generated was exposed to descriptive analysis, ADF unit root test, Johansen cointegration test, pairwise granger causality test, ECM estimation and a set of post estimation (diagnostic) tests. Johansen cointegration test showed that there is no long run relationship between exchange rate fluctuations and All-Share Index. Granger causality test indicated that there is no relationship between the variables. Error Correction Model (ECM) estimation revealed that Naira-to-US Dollar exchange rate has a negative insignificant effect on ALSI while Naira-to-British Pound exchange rate and Naira-to-Swiss Franc exchange rate have positive influences on ALSI. However, only the effect of Naira-to-British Pound exchange rate was statistically significant. Hence, the study concluded that exchange rate fluctuation has an insignificant effect on capital market All-Share Index (ALSI) in Nigeria. As such, there is need to properly address the structural defects associated with the Nigerian economy so that government’s naira devaluation policies will achieve one of its core objectives of attracting more foreign investors into the Nigerian capital market. It is also imperative that the Nigerian capital market is brought to par with its contemporaries in Africa and beyond.