Purpose: This study examined the relationship between stock market liquidity—characterized by trading volume, trading value, and the number of transactions—and the stock market index in Syria, particularly emphasizing the moderating role of the exchange rate.

Design/Methodology/Approach: The study is rooted in a positivist philosophy, emphasizing objectivity and empirical data. It follows a deductive approach, relying on established theories and previous research findings. The research design is explanatory and utilizes time series data analysis to draw conclusions.

Findings: The findings indicate that both trading volume and exchange rate have significant long-term impacts on the stock market index. In the short term, trading value and the number of transactions also significantly influence the index. Furthermore, the exchange rate acts as a moderating factor in the relationships among these three trading activity variables and the market index, highlighting its vital role in influencing investor confidence and maintaining market stability.

Recommendation: Policymakers and regulators need to prioritize stabilizing the exchange rate while also enhancing market liquidity. Strengthening the financial infrastructure and promoting macroeconomic integration are essential steps in fostering a robust market environment. For investors, it's crucial to factor in exchange rate movements when making investment decisions. Additionally, employing liquidity metrics can serve as valuable indicators of stock market performance.

Index terms: stock market index, Trading Volume, Trading Value, Transactions Number, Exchange rate.