I am sure you have all noticed that we have avoided the volatility that characterised the exchange rate in the first half of 2009 and  12  BIS Review 49/2010  maintained convergence between the official and parallel market rates of exchange for about eight consecutive months now.
A recent paper shows that, in countries with relatively thin financial markets like Nigeria, a high degree of exchange rate flexibility consistently leads to lower growth. A 50% increase in exchange rate volatility leads to a 0.33% reduction in annual productivity growth; and a fixed exchange rate could add almost one percentage point to a country like Nigeria’s annual GDP growth. 3.