IMPACT OF INFLATION AND INTEREST RATE TOWARD SAUDI ARABIA STOCK MARKET

Abstract

The study is aimed to investigate impact of inflation and interest rate toward Saudi stock market. There was lack of previous studies on impact between these two variables on the stock market in Saudi Arabia. The study was used quarterly time series data from June 2007 to December 2015. Besides, this study used regression analysis to determine hypothesized relationship between inflation, interest rate and stock market return in Saudi Arabia. The result showed inflation had impact toward Saudi stock returns but interest rate had no impact on Saudi stock returns.