This article explores how exchange rates and interest rate inertia affect monetary policy. By using a macroeconomic model with habit formation and inflation inertia, the study shows that shocks to demand and supply can have lasting effects on output and inflation. The research suggests that a policy rule considering expected inflation, output, and exchange rates can help reduce volatility in output and inflation. However, the effectiveness of this rule depends on the level of inflation persistence in the model. When inflation persistence is high, an inertial policy rule can lessen the impact of supply shocks on inflation and interest rates.