This study examined the effect of monetary policy instruments on Nigeria’s stock market performance. All-share index (ASI) is used as a measure of stock market performance and cash reserve ratio (CRR), real interest rate, and broad money supply (MS) are used as proxies for monetary policy instruments. Data for the period from 1986 to 2024, gathered from the Central Bank Statistical Bulletin and WDI, were used. The unit root test was conducted using the Augmented Dickey-Fuller and Phillips-Perron tests. The ARDL model was used for estimation and analysis. The ARDL bounds test shows that there exists a long-run relationship among the variables. The result shows that the broad money supply had a significant positive effect on the short-run stock market performance, while the real interest rate had a significant negative effect. The cash reserve ratio had no significant effect on the index of all shares, both in the short and long run. The student concluded that monetary policy instruments influence short-run stock market performance. Therefore, CBN should prioritize strategies that foster sustainable economic growth and macroeconomic stability as the primary means of supporting the stock market because monetary policy instruments alone cannot enhance stock exchange performance.
Okereke et al. (Tue,) studied this question.