The impact of exchange rate fluctuations on stock market performance in Egypt

Abstract

This paper aims to investigate the impact of exchange rate fluctuations on the stock market performance in Egypt. This study applies time series data. The sample of this study is monthly data from February 2012 to December 2017. This period was selected specifically to cover the floatation of the Egyptian pound period. The study selected independent variable (exchange rate fluctuations) and moderating variable (interest rates); the most common factors affecting the stock market performance in previous literature. The dependent variable was the Egyptian stock market performance, where EGX30 monthly return was taken as a proxy for it. It was concluded that there is a direct significant relationship between exchange rate fluctuations and the Egyptian stock market performance, while there was a weak direct relationship between interest rate and Egyptian stock market performance.