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ABSTRACT
This study investigates the impact of monetary policy on economic growth in Nigeria applying the multivariate ordinary least square (OLS) technique using time series data from 1981 to 2021. Real gross domestic product (RGDP) is the dependent variable and proxy for economic growth while monetary policy rate (MPR) money supply (M2) and interest rate (INT) were proxies for monetary policy. A major finding is that there is a significant positive relationship between money supply and economic growth while monetary policy rate and interest rate have no significant effect on economic growth. The study recommends that regulatory authority (CBN) should reduce the current monetary policy rate in order to reverse its negative effect on economic growth. Also, the current rate of cash reserve should be reduced in order to free more cash for deposit money banks to lend to their customers who will invest the money and this will improve economic growth. Increase in money supply improves economic growth. Thus, increase in money supply should be maintained within acceptable threshold to sustain its positive effect on economic growth.
