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This study applied the error correction model to examine the relationship between financial deepening and capital market returns in Nigeria. The study was conceived because of the importance of capital market as an engine and fulcrum that propel economic growth. As such, the degree of financial services it receives should be a matter of concern to finance and economic researchers. However, after empirical analysis of data obtained from the central bank of Nigeria and the National Bureau of Statistic, it was majorly found that the ratio of money supply to gross domestic product has a positive and significant impact on the returns of the capital market of Nigeria. It was also found that ratio of credit to private sector to gross domestic product has negative and significant influence on the return of the capital market in Nigeria. In the light of these findings, the researchers advise the central bank of Nigeria to always do proper evaluation and monitoring of the distribution of such financial services, aimed at ensuring it gets to the targeted individuals, thereby stimulating economic growth in Nigeria. In addition, supervisory authorities of the capital market in Nigeria should in her advisory role, organize technical sections for investors on the rechanneling of their returns in the exchange. This will go a long to increase the capitalization of the capital market.

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This study modeled volatility and daily exchange rate movement in Nigeria with daily exchange rate between Nigeria Naira and US Dollar from January 2, 2001 to May 20, 2019 collected from the Central Bank of Nigeria (CBN). The results of the estimated models revealed that conditional variance (volatility) has positive and significant relationship with exchange rate returns between Nigeria Naira and US Dollars, which corroborates the theory that predicts positive relationship between return and volatility for risk averse investors. Also found that exchange rate volatility between Naira / US Dollar is persistent. It was also discovered that goods news produces more volatility than bad news of equal magnitude. The researchers therefore suggested that the Central Bank of Nigeria should always proffer timely intervention to reduce the volatility persistence. This will go a long way to counteract or moderate the excess volatility between Naira and US Dollar transactions.

This study investigated a pertinent question on the lips of every Nigerian; exchange rate regime, Quo Vadis Nigeria? Nigeria, Quo Vadis (where do we go)? under two alternative managed floating regimes; Dutch Auction System and post Dutch Auction System regimes, within the Autoregressive Distributive Lag methodology using monthly data covering from July 2002 to July 2017. The results for the full sample show that none of the selected macroeconomic variables has a significant short run relationship with the nominal effective exchange rate. In the long run, all the variables, except interbank rate, show negative relationship with nominal effective exchange rate. However, while the effects of oil prices, interbank rate and the prime lending rate are significant, the effects of inflation and stock prices are insignificant. The results for the Dutch Auction System sample show little evidence of a negative short run relationship between nominal effective exchange rate and inflation while oil prices, prime lending rate, interbank rate and stock prices all show no evidence of a short run relationship with exchange rate. On the contrary, oil prices, prime lending rates and stock prices all show significant negative long run relationship with nominal effective exchange rate. The results for the post Dutch Auction System sample show evidence of a positive short run relationship between stock prices, interbank rate and nominal effective exchange rate. On the other hand, inflation, oil prices and prime lending rate show no short run relationship nominal effective exchange rate. However, there is evidence of a lagged positive relationship between inflation and nominal exchange rate. The cointegration test for post Dutch Auction System sample gives inconclusive results. We therefore, conclude that the choice of exchange rate regime matters for macroeconomics performance in Nigeria and that the closure of the Dutch Auction system by the monetary authorities significantly altered the relationship between nominal exchange effective exchange rate and macroeconomic variables.