Al-Hikmah University Journal

Monetary policy plays a significant role in driving the economy of any nation. This study aimed to examine the impact of monetary policy on economic performance in Nigeria from 2006Q1 to 2023Q4. The study utilized both Autoregressive Distributive Lag (ARDL) and Non-Linear ARDL (NARDL) models to investigate the asymmetric impact of monetary policy on economic performance in the short and long term. The study used real GDP as a proxy for economic performance and considered exchange rate and money supply as independent variables representing monetary policy. The findings showed an insignificant negative relationship between monetary policy variables (money supply and exchange rate) and economic performance in the short run using the ARDL technique. The NARDL results also demonstrated that money supply and exchange rate had a negative insignificant effect on economic performance in the long run. From these results, it was concluded that there is no relationship between economic performance and monetary policy in both short-run and long-run periods. Based on these findings, it is recommended to manage monetary policy to attract domestic and foreign investment by maintaining an appropriate quantity of money supply and the central bank should use other instruments aside from exchange rate to motivate the economic performance of the nation.