IMPACT OF MONETARY POLICY ON ECONOMIC GROWTH IN NIGERIA (1986 -2019)

Abstract

The growing importance of monetary policy has made its effectiveness in influencing economic growth a priority to most governments. Therefore the study investigates the impact of monetary policy on economic growth in Nigeria from 1986 to 2019, by using interest rate variables for monetary policy and GDP as a proxy for economic growth. The study applied the autoregressive distributive lag (ARDL) model to analyze the data. The result shows that interest rate and domestic credit have a statistically significant impact on economic growth in Nigeria while the exchange rate on the other hand has a statically non-significant effect on economic growth. It is therefore recommends that the central bank of Nigeria should continue to use appropriate monetary policy instruments to support Nigeria’s economic growth taking into account economic and political conditions in the country