Abstract
The study examined exchange rate windfall and performance of deposit money in Nigeria. Ex post facto research design was adopted by the study. Ordinary least square regression was employed to analyze the data. It was found that exchange rate gains has positive and significant effect on the performance of deposit money banks, exchange rate premium has positive and significant effect on performance of deposit money bank and parallel market foreign exchange rate has positive and significant effect on deposit money bank in Nigeria. The study concluded that windfalls in foreign exchange transactions have positive and significant effect on deposit money banks in Nigeria. The study recommended that Banks shouldimplement a coordinated scheme that will boost exchange rate gains; this will further expand the income accruing to the bank from such foreign exchange denominated transactions and boost the banks financial performance, banks should expand their other operations in the foreign exchange market that generate higher premium, this will increase the contribution of the exchange rate premium on their income base and profitability and there should be leverage on the growing size of banks' participation in the foreign exchange market to further boost their financial performance.