Covid-19 Pandemic and the Nigerian Financial Market
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Date
2021
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Publisher
Journal of Management Information and Decision Sciences
Abstract
The study empirically investigated the effect of the Coronavirus (COVID-19) outbreak on
the performance and effectiveness of the Nigerian money market, capital market, and foreign
exchange market. The study used time-series data for 120 working days after the first COVID-19
confirmed case in Nigeria and used both exploratory and multiple regression analysis to evaluate
the effect of COVID-19 outbreak on the Nigerian financial market. Open buy back rate (OBRR),
All Share Index Volume (ASIV) and Parallel Foreign Exchange Rate (PFXR) were used as
variables for money market, capital market and foreign exchange market, respectively. The data
representing these variables were subjected to econometric analysis, including the ADF-Fisher
unit root test, Johansen co-integration test and Ordinary Least squares (OLS) regression
technique. Results from the analysis show that the number of COVID-19 cases is inversely related
to the interbank money market rate and the All Share Index Volume of the capital market but
directly related to the foreign exchange rate. The study concludes that COVID-19 pandemic
significantly affects the Nigerian financial market. Therefore, it was recommended that the
government should take preventive steps against financial challenges resulting from health risk in
order to ensure stability in the financial market. In addition, business owners should provide
motivations that will allow their staff to work remotely, wherever they are. Furthermore, the
government should, by way of policies, encourage domestic production of goods and services
Description
Keywords
Covid-19, Financial market, Pandemic