The article presents a method to estimate long-term monetary policy rules in small open economies, using statistical tests and analyzing policy responses. The study focuses on Trinidad and Tobago and finds a supported rule for the exchange rate, showing how oil price shocks affect the economy through US prices. The analysis also reveals significant adjustments in the exchange rate towards its target level, with influences from foreign and domestic factors. Forecast analysis highlights the importance of oil price forecasts on monetary policy decisions. The model used generates reliable forecasts with important implications for policy-making.