Monetary Policy and Economic Growth in Nigeria

Abstract

This study investigated the nexus between monetary policy and real gross domestic product in Nigeria between 1980 to 2015. The specific objective of this study is to examine the impact of treasury bills rate, exchange rate and interest rate on real gross domestic product. The study employed the Ordinary Least Squares (OLS) methodology, using secondary data collected from Central Bank of Nigeria (CBN) statistical bulletin for the period of 1980 to 2015. The study found a positive and no significant relationship between treasury bills rate and real gross domestic product but there was a negative and no significant relationship between interest rate and real gross domestic product, while there was a positive and significant relationship between exchange rate and real gross domestic product. The study concludes that monetary policy has significant influence on real gross domestic product in Nigeria. The study recommends that when government seeks to solve the problem of exchange rate stability it should invest in capital formation to boost production and due implementation of monetary policy should be given top most priority by managers of the economy.