Rupiah plunged versus US Dollar. One of the causes is the emergence of a variant of the Corona virus from Africa, Omicron, which causes risk aversion.
The Rupiah opened lower versus the US Dollar on Monday (29/November). Currently, USD/IDR is trading at around 14,330, reversing the movement late last week which showed weakness for the US Dollar with closing price at 14,275.
In addition to the threat of the Fed's Rate Hike, the decline in the movement of the Rupiah this time could not be separated from the emergence of a new variant of COVID-19, namely Omicron. Fear of a pandemic has the potential to make many countries lock down, thus leading to a global economic slowdown. This condition is not favorable for Rupiah, which is the currency of developing countries. Because when market sentiment worsens as it is today, risk aversion will favor safe haven assets such as the US dollar.
Some analysts estimate that the Rupiah exchange rate is still in danger of continuing its decline if market sentiment continues to deteriorate. Investors are also warned to remain vigilant regarding potential market volatility, given that information on Omicron is still quite limited.
"Until then, market volatility is likely to remain high," said National Australia Bank analyst Rodrigo Catril.
For information, the new variant of the COVID-19 virus B.1.1.529 or Omicron has now been first detected in South Africa and has now also been found in several countries such as Hong Kong, England, Italy, and Belgium. On Sunday, Australia also reportedly found two positive cases of Omicron corona. Both came from South Africa and landed in Sydney. This variant is said to be more contagious than other variants, and is designated by the WHO as a Variant of Concern (VoC).
The Indonesian Minister of Health, Budi Gunadi Sadikin, explained that the current government has tightened air, sea and land transportation routes to prevent the entry of the new variant.
"We also see the risk factor for anyone who has a lot of flights to Indonesia and we do this not only for airports but also for seaports and land borders because in our experience the Delta variant actually enters from the sea, so we guard it there," Budi said in a statement. press conference on the Government's Response to the Omicron Variant.
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