Volume 2 - Issue 2, March - April 2026

This study examines the impact of monetary policy on economic output growth in Nigeria using annual time series data covering the period 1980–2024. The study employs the Autoregressive Distributed Lag (ARDL) model to analyze both the short-run and long-run relationships between monetary policy variables and economic growth. Real Gross Domestic Product (RGDP) is used as the dependent variable, while the Monetary Policy Rate (MPR), domestic credit to the private sector, Cash Reserve Ratio (CRR), liquidity ratio, and inflation rate are used as explanatory variables. Preliminary analysis was conducted using descriptive statistics and unit root tests to determine the stationarity properties of the variables. The results from the ARDL bounds test confirm the existence of a long-run relationship between monetary policy variables and economic output in Nigeria. The regression results indicate that domestic credit has a positive and significant effect on economic growth, suggesting that credit expansion enhances productive investment and economic performance. In contrast, tight monetary policy instruments such as high interest rates and reserve requirements tend to reduce economic activity by increasing the cost of borrowing. Inflation was found to have a negative impact on economic growth, highlighting the importance of price stability in promoting sustainable economic development. The error correction mechanism further confirms that short-run deviations from equilibrium are corrected over time, indicating a stable long-run relationship between the variables. Based on these findings, the study recommends that monetary authorities should increase credit allocation to productive sectors, maintain stable and moderate interest rates, strengthen inflation control mechanisms, and improve financial sector efficiency. These policy measures are essential for enhancing the effectiveness of monetary policy and promoting sustainable economic output growth in Nigeria.

Bello H.T, Senbore Oluwafunmilola .O, Okeowo Khadijah .O, Olaniyi Johnson .A, Ogunbayo Oluwaseyi .O, Odugbemi Yetunde .O, Oladele Olajumoke.O, Unagha Oluchi. C,"Monetary Policies, Interest Rate and Output Growth in Nigeria (1980-2024)" International Journal of Advanced Multidisciplinary Research and Educational Development, V2(2): Page(1261-1273) Mar-Apr 2026. ISSN: 3107-6513. www.ijamred.com. Published by Scientific and Academic Research Publishing.