Implication of Regulatory Agencies on the Development of Capital Market in Nigeria: 2000 – 2014

Abstract

Capital market is a section of the financial market established to facilitate financial intermediation which is the hub of economic growth and development. This study examines the impact of regulatory agencies on the Nigerian capital market development from 2000 to 2014. The research design used was expo-facto design. It was found that while interest rate and capital market development are negatively correlated at an insignificant margin; the quantity of money in circulation and foreign exchange rate has positive relationship with the Nigerian capital market development. The study recommended that the monetary authorities should adopt money supply policies that conform to the level of economic activities in the country; pursue sound and responsible interest rate policies that are compatible with the capital market development; pursue flexible exchange rate policy that is largely influenced by the forces of demand and supply.

Keywords: Capital market development, interest rate, financial system, foreign exchange rate and money supply.