The principal objective of monetary policy is to ensure the stability of the financial system by determining the exchange rate policy that stabilizes prices and sustains growth in the economy. This research study investigated the impact of exchange rate volatility on economic growth in Nigeria spanning 1981 to 2020. Annual Secondary data used were sourced from the World Bank, Central Bank of Nigeria Statistical Bulletin of various issues. The study employed the ARCH/GARCH model in measuring volatility and ARDL estimation technique. The findings revealed that in the long run, exchange rate volatility has a negative coefficient while the exchange rate has a positive coefficient but is not statistically coefficient. However, in the short-run, the effect of exchange rate volatility was positive and statistically significant at one percent and the effect of exchange is negative and statistically significant at one percent. The study recommends that the Central Bank of Nigeria should sustain the current fluctuation of the exchange rate in Nigeria for the sustenance of the positive short-run effect on Nigerian real GDP per capita growth and continue with the managed float exchange rate system which is already in place. Policies that will improve production and discourage importation should be encouraged to move the economy from consumption to production economy.