A number of fans have been hoping for the pair, played by Bradley James and Colin Morgan, to get together.
McGrath has now told Digital Spy that she thinks the idea is "genius" and "hilarious".
"There is no romance between the two of them," she said. "They are friends... and I think there is a tongue in cheek [side] played up to it.
"But I think whatever the fans want to feed into the show... Whatever makes them happy, whatever they see from it, how can you deny them that? They're fans! That's what they want - go for it."
Watch Katie McGrath chatting about the Arthur and Merlin 'bromance' below: