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VOL. 6, ISSUE 2 (2024)
The impact of the exchange rate, interest rate, and inflation on stock price
Authors
Opeyemi Famubode, Hafidh Ali
Abstract
This study investigates the impact of exchange rate fluctuations,
interest rate changes, and inflation on stock prices, focusing on recent global
economic disruptions. The COVID-19 pandemic has heightened the volatility of
these macroeconomic variables, influencing stock market performance in complex
ways. This research employs a quantitative approach using multiple regression
analysis on data spanning 10 to 20 years. The findings highlight that exchange
rate volatility significantly affects the stock prices of multinational firms,
necessitating advanced risk management strategies. Interest rates, manipulated
through central bank policies, show a direct inverse relationship with stock
prices, although unconventional monetary policies like negative interest rates
present mixed effects. Inflation remains a critical factor, with increased
inflationary pressures leading to higher market volatility and lower stock
prices. These insights are crucial for investors and policymakers aiming to
stabilize financial markets and promote economic resilience.
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Pages:70-75
How to cite this article:
Opeyemi Famubode, Hafidh Ali "The impact of the exchange rate, interest rate, and inflation on stock price". International Journal of Educational Research and Studies, Vol 6, Issue 2, 2024, Pages 70-75
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