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The Relationship between Short-term Interest Rate and Stock Market Performance: Evidence from Sri Lanka

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dc.contributor.author Weerakoon W.P.P.K.
dc.contributor.author Jameel A.L.M.
dc.date.accessioned 2017-02-15T08:39:06Z
dc.date.available 2017-02-15T08:39:06Z
dc.date.issued 2016
dc.identifier.citation Weerakoon W.P.P.K. and Jameel A.L.M. 2016. The Relationship between Short-term Interest Rate and Stock Market Performance: Evidence from Sri Lanka. In Proceedings of the 2nd International Conference in Accounting Researchers and Educators (ICARE 2016), 11th January 2017. Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka. en_US
dc.identifier.issn 2465- 6046
dc.identifier.uri http://repository.kln.ac.lk/handle/123456789/16401
dc.description.abstract The issue on the relationship between stock market performance and the interest rate has been discussed by economist and researchers since both play important roles in influencing one nation’s economic development. The aim of this paper is to examine the relationship between short-term interest rate and stock market performance for Sri Lankan stock market using the data from July 2005 to June 2015. We used three-month Treasury bill rate as the proxy for the short-term interest rate and All Share Price Index (ASPI) as the proxy for the stock market performance. In addition to the short-term interest rate, the regression model consists of other three important macroeconomic variables such as money supply, consumer price index and exchange rate in order to extract the effect of monetary policy, country’s price level and foreign exchange rate on the stock market performance. The Multiple regression results in displays that the relationship between short-term interest rate and stock market performance exist as significantly negative. Further, the study found that the exchange rate and inflation rate have negative and money supply has a positive relationship with ASPI. The findings of the study hold practical implications for policy makers, stock market regulators, investors, and stock market analysts. en_US
dc.language.iso en en_US
dc.publisher Department of Accountancy, Faculty of Commerce and Management Studies, University of Kelaniya, Sri Lanka en_US
dc.subject All Share Price Index en_US
dc.subject Treasury bill rate en_US
dc.subject Money supply en_US
dc.subject Colombo Consumer Price Index en_US
dc.subject Exchange rate en_US
dc.title The Relationship between Short-term Interest Rate and Stock Market Performance: Evidence from Sri Lanka en_US
dc.type Article en_US


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