Exchange Rate Volatility in Nigeria: Evidence from a Parametric Measure
The study uses a parametric measure to discover the trend and possible causes of exchange rate volatility in Nigeria over the period 1986: 1-- 2009: 4. The study revealed that exchange rate has been volatile in Nigeria given the fact that the standard deviation of exchange rate has been unusually high and unusually low during the period under investigation. The parametric measure of exchange rate further confirmed a high degree of volatility which portrays higher risk to a risk-averse economic agent. The study therefore recommends that the government should always take a cognizance look at the frequent movement in the exchange rate with a view to regulating it because higher risks attached to high degree of volatility may scare off both domestic and foreign investors.