Monetary policy is one of the most important factors in the macroeconomic management of open economics. To maintain secureness and development in the economy, GDP is the most commonly used measure for the size of the economy. This study focuses on the effect of Monetary policy on the economy. The relative effectiveness of GDP can be found by considering some of the macroeconomic variables like interest rate, inflation rate, and Money supply of selected Asian countries. Monetary policy helps maintain stability and stimulate economic growth by affecting macroeconomic variables. By using the Regression analysis Technique, we can find out is there any relationship exists between the considered variables. This study aims to recognize how macroeconomic variables impact monetary policy. At the end of the research, you will have a clear idea of how GDP impacts the monetary policy of India and Pakistan. I have compared these 2 countries over their 5 years past data and commented on how the interest rate, inflation, and Money supply affects the Gross Domestic Product (GDP) of the economy.

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