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Abstract
This study examined the effect of interest rate on economic growth over the period from 1981-2019. Data for the study was obtained from secondary sources. The researcher made use of time series data which were collected from the Central bank of Nigeria statistical Bulletin. The data collected was analyzed using the Auto-regressive distribution lag (ARDL) and Granger Causality test. The results of our finding shows that interest rate has a negative and insignificant effect on economic growth in Nigeria. Therefore, the study recommended that interest rate should be liberalized in Nigeria and also aim at reducing the rate of inflation in Nigeria so that the output level can increase which entails economic growth in the face of the global financial crunch. Again, a strong monetary policy should not be based on interest rate regulation, except our financial sector is improved and the awareness of the activities of the financial institutions taken to ordinary Nigerians. Keywords: Interest Rate, Economic growth, Exchange Rate, Inflation Rate, Trade openness.