Monetary Policy and Share Pricing Business in Nigeria

A. Bolaji Adesoye and Akinwande Atanda

MPRA Paper from University Library of Munich, Germany

Abstract: The anatomy of Nigerian financial system is composed of the money and capital markets. Monetary policy is a framework used by the apex bank to regulate the flow of loanable funds in the economy, though the pricing of equity used by private investors to raise capital from the economy is carried out at the capital market end of the system. As earlier empirical studies have shown the relationship between monetary policy and stock market, this study provide a precise insight in the mechanism of interaction that co-exist between monetary policy and share pricing in Nigeria. The study identified money supply and interest rate (credit creation) as the main channels through which monetary policy influence sharing pricing in an open economy like Nigeria.

Keywords: Monetary Policy; Share Pricing; Monetary instruments; Money supply; Equity/capital market; money market; financial system; IPO pricing; Nigeria (search for similar items in EconPapers)
JEL-codes: E52 G0 G12 G15 (search for similar items in EconPapers)
Date: 2012
New Economics Papers: this item is included in nep-afr, nep-mac and nep-mon
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