Financial strategy during the war: KIT Group analysts explained how to effectively protect savings from inflation

In the context of the ongoing war and rising inflationary pressure, the issue of preserving personal savings is becoming critically important for every Ukrainian. Although the National Bank is gradually transforming and easing currency restrictions, these steps mostly concern the defense sector and business, while for ordinary citizens, limits on the non-cash market remain strict. In particular, the limit on purchasing foreign currency in a single bank is 50,000 UAH per month, which significantly restricts the possibilities for rapid capital formation in bank accounts.

This is stated in a blog by KIT Group experts.

Under such conditions, financial analysts recommend that citizens focus on the cash market, which offers maximum freedom of action and flexibility without any restrictions on the amounts of purchase or sale.

"A more convenient solution for investing in foreign currency is cash, as in fact, the required amount can be purchased at the country's exchange offices on any day without restrictions, just as any volume of currency can be sold," KIT Group analysts explained.

In developing a personal anti-crisis strategy, specialists advise relying on time-tested tools. The main asset should remain the US dollar, the share of which in a portfolio is advisable to keep at a level of 40% to 50% and higher. For risk diversification, the classic combination of the dollar and the euro in proportions from "70 to 30" to "50 to 50" is ideal. If an investor seeks to create a package that is as resistant as possible to global shocks, the Swiss franc and the British pound should be added to it.

The relative stability in the market during May, when the exchange rate fluctuated within the range of 43.89–44.15 UAH per dollar, was ensured by stable international tranches; however, this lull is a temporary window of opportunity.

"In conditions of increased economic and political turbulence against the backdrop of the ongoing war and rising inflation, it is impossible to expect exchange rate stability in June or July-August," KIT Group experts emphasized.

That is why accumulating in hard cash currency is not just a way to earn money, but a vital step for the security of a personal budget.

"Cash currency, in addition to the absence of restrictions, also provides an opportunity to avoid losses due to the devaluation trajectory of the hryvnia. Of course, one of the main goals of forming cash savings in foreign currency is to counter the inflationary factor and preserve funds from depreciation due to rapid price growth," KIT Group specialists concluded.