Hundreds of People in Singapore Positive for Omicron, Dollar Drops?

Jakarta, CNBC IndonesiaThe Singapore dollar exchange rate strengthened sharply against the rupiah in trading Monday (27/12) after fluctuating throughout last week. The Singapore dollar was able to strengthen even though hundreds of people tested positive for the Omicron variant of the corona virus.

At 10:34 WIB, SG$ 1 was equivalent to Rp 10,488.76, the Singapore dollar strengthened 0.31% on the spot market, Refinitiv data reports.

Cases of disease due to the corona virus (Covid-19) of the Omicron variant in Singapore have now reached 650 people, after experiencing an increase of 104 cases last Sunday.
As published by Channel News Asia (CNA) from the Ministry of Health’s website, the new confirmed infections of Omicron consisted of 73 imported cases and 31 local cases.

Singapore admits to getting many cases of Omicron because of its high prevalence in a number of countries and regions.

“Given its high transmission rate, it is only a matter of time before the Omicron variant spreads in our community,” the Ministry of Health said.

“It is important that everyone continues to play their part and remain vigilant to reduce the spread of Covid-19, and come forward to receive vaccinations or booster doses when offered,” the agency added.

However, the Singapore dollar is still able to strengthen against the rupiah, because the Omicron is said to be no more dangerous than the delta variant.

International evidence suggests that the Omicron variant tends to be more infectious but not as severe as the Delta variant. And that vaccines, especially boosters, maintain substantial protection against hospitalizations caused by Omicron,” the Ministry of Health said.

The government also said it would not provide special treatment for those with confirmed Omicron. Cases will be the same approach as other types of Covid-19, isolated at home or available health facilities depending on the patient’s clinical presentation.

Singapore confirmed its first two Omicron cases on December 6, both imported cases.

In addition, the Singapore dollar is also supported by the expectation that the Monetary Authority (MAS) will tighten monetary policy again, because inflation in Singapore is still high. The Singapore government last Thursday reported that inflation based on the consumer price index (CPI) in November grew by 3.8%. year-on-year (yoy), this level is the highest since February 2013.

In addition, last month the Singaporean government reported producer sector inflation (producer price index/PPI) which shot to its highest level in 40 years. October’s PPI reportedly shot up 25.4% (yoy), much higher than the previous month’s 21.3% YoY. Inflation in the producer sector was the highest since March 1980.

When inflation in the producer sector is high, the selling price of products is likely to be increased and this will have an impact on consumer inflation (CPI), which is a consideration for MAS in tightening monetary policy.

CNBC INDONESIA RESEARCH TEAM

[Gambas:Video CNBC]

(pap / pap)



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