ABSTRACT

This study examined lending rule and economic growth in Nigeria within the sample period from E)S1 to 21)18. The broad objective ofthe study was to examine the impact of lending rate and economic growth in Nigeria, t he methodology of the study was the cointegralion and vector error correction approach. The variables used in the study include; interest rale (1NTR). Inflation Rale (INN). Real Exchange Rale (Real EXR) and Bank Lending rate (BLR)as the explanatory variables while real gross domestic product (RGDR)was employed as the dependent variable. These Data on these variables were sourced from (he Central Bank of Nigeria (CBN) statistical bulletin volume 29. 2018 The unit root result revealed that none ofthe variables were stationary at level, but at first differencing, all the variables became stationary. The Johansen Coinlegration test revealed that there is a long run relationship among the variables employed in the study. The result ofthe I EC M showed indicates that exchange rate and Bank lending rate hadpositive relationship with economic growth. Equally. the result indicates that interest rale and inflation had anegalive relationship with economic growth. The R ' shows that 70% of the changes in the dependent variable, are as a result of the changes in the explanatory variable. The result ofthe BreuschGodfrey Serial Correlation l.M Test shows that there is no serial correlation in the model. The granger causality test shows that there is a unidirectional relationship between monetary policy and economic growth Therefore, the research recommends that, the federal government through the apex bank It 'BNJ should compel the commercial hanks to reduce their level ofinterest rate charged to borrowers investors; This is expected to increase the level ofdomestic investment in the economy