Effects of the dollar index fluctuations on the performance of the Kenyan stock market

Abstract

The performance of a country’s stock market serves as a crucial measure of the economic health of that given country. Paytakhti Oskooe, (2010) conducted a structured analysis of the connection between stock market performance and economic growth in Iran and determined that the stock market functions as a precursor to future economic growth. Similarly, Paramati, & Gupta, (2011) explored whether stock market performance drives economic growth or if the reverse is true, while also analyzing both short-term and long-term dynamics of the stock market Additionally, local studies have been conducted to confirm the role of stock market performance in contributing to economic growth in Kenya concluding that the stock market has a positive effect on economic growth (Olweny & Kimani, 2011). Since the importance of economic growth cannot be disputed, it is therefore necessary to study what factors drive and thus assess the performance of the Kenya’s stock market.