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The aim of this study is to highlight the impact of interest rate and exchange rate on stock market performance of Pakistan. Time series data for 20 years (2001-2021) collected from world development indicator. Multiple linear regression model is applied. For the analysis of data Ordinary Least Square, tests like multi-collinearity, Augmented Dickey Fuller test, serial correlation test, co-integration techniques were used to locate out the long as well as short run and significant relationship. The results show that the interest rate has negatively while the exchange rate positively and significantly affected the stock market performance. The study has a good scope for policy implication and suggest recommendation for the government to handle the bank rate and exchange rate to regulate the capital market of Pakistan to boost economic activity and accelerate GDP growth.
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A 2022 study studied this question.
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