Concerns as US inflation hits 40-year high

High rates: A man counting US$20 bills. The US and ringgit exchange rate may also be impacted if there are volatile swings in the market. — AP

THE United States’ inflation hitting a 40-year high at 7.5% has raised concerns, among other things, aggressive interest rate hikes in the US and the ensuing capital outflows from the emerging markets (EMs).

If that happens, Malaysia too will not be spared as narrowing interest rate differentials spur capital to flow back into US markets to take advantage of the higher rates there.