AN ANALYSIS OF FOREIGN EXCHANGE RISK: THE NIGERIAN EXPERIENCE

This paper tries to analyse the various risks to which organizations and Nations are exposed to when they are involved in foreign exchange transactions, it notes that the risks range from Transaction exposure through Transaction and Economic exposures. While the exchange market hedge, money market hedge, balance sheet and also through leads and lags. The paper further addressed this issues of foreign exchange risks as it affects the Nigerian economic system. The paper concludes by noting that one of the basic risks unique to Multinational businesses is foreign exchange risks - the risk that a change in exchange rate will prove advantageous or disadvantageous to a business form and so the need for the firms to take adequate precautions against such risk.