study examines the influence of foreign exchange rate volatility and interest
rate, on the stock performance of the firms listed on the Uganda Securities Exchange
(USE). Using the Arbitrage Pricing Model on 16 firms for a ten (10) year period. The findings
of this study suggest that increase in foreign exchange rate, and
interest rate reduces the performance of the stocks of the listed firms in USE.
This implies that when the Uganda shilling depreciates against the US dollar or when interest rates
increase, the performance of stocks on the USE will shrink and vice versa. The major contribution, is the localization
of research findings on how movements in macroeconomic factors affect
performance of stocks.
Key words: Foreign
Exchange, Interest Rates and Stock Performance