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This study examines the impact of monetary policy on Nigerian economy using annual data from the period 1970-2009. The empirical findings starts by checking the stationary level of variables using the Augmented Dukey-Fuller test. Also the stationary test was followed by the co-integration test to test for long run relationship among the variables, which was followed by testing the short run relationship among variables using the Vector Autoregressive model. From the Augmented Dukey Fuller unit root test, it was observed that INF was stationary at level form, RGDP and RIR stationary at first difference, RER stationary at second difference. Also from the co-integration test, it was observed that no long run relationship exist among variables. More also, the VAR model reflects that, monetary policy has significant impact on economic growth. From the findings, this project work suggests that government should intensify its effort in pursuing policies that are anti-inflationary in nature.