Impact of Oil Price Shocks and Exchange Rate Volatility on Stock Market Behavior in Nigeria


  • Adedoyin I. Lawal Landmark University
  • Russel O. C Somoye Olabisi Onabanjo University
  • Abiola A. Babajide Covenant University



oil prices, exchange rate, share prices, volatility, EGARCH


The impact of exchange rate and oil prices fluctuation on the stock market has been a subject of hot debate among researchers. This study examined the impact of both the exchange rate volatility and oil price volatility on stock market volatility in Nigeria, so as to guide policy formulation based on the fact that the nation’s economy was foreign induced and mono-cultured with heavy dependence on oil. EGARCH estimation techniques were employed to examine if either the volatility in exchange rate, oil price volatility or both experts on stock market volatility in Nigeria. The result shows that share price volatility is induced by both the exchange rate volatility and oil price volatility. Thus, it is recommended that policymakers should pursue policies that tend to stabilize the exchange rate regime on the one hand, and guarantee the net oil exporting position for the economy, that market practitioners should formulate portfolio strategies in such a way that volatility in both exchange rates and oil price will be factored in time when investment decisions are being made.


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Author Biographies

Adedoyin I. Lawal, Landmark University

Dept. of Accounting and Finance

Russel O. C Somoye, Olabisi Onabanjo University

Department of Accounting, Banking and Finance

Abiola A. Babajide, Covenant University

Dept of Banking and Finance


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