Offshoring savings to hedge against inflation? : eupersonalfinance


Hi! I was thinking about a strategy but I’d love to hear how y’all think about it. Please be kind, as I am a total noob here.

So I am based in EU but I am originally from Asia. I earn in EUR and have invested a bit here (mainly ETF tho), and I intend to go long. However, I keep some cash liquid in case of emergency. I have 2 accounts for this purpose: 1 in EUR and 1 in my home currency. In EUR naturally there’s no interest rate. Hell, it’s already good enough if the bank don’t charge me like 50 EUR yearly just to keep my account open. However, I am well aware that inflation still exist in EU (almost 2% pa as far as I understand?) so my money is losing its value. Meanwhile back home I can easily get 4.5% pa on the typical saving account and 5.5% pa for some time deposit, with around 3% pa inflation these days. Ofc there is another risk of currency devaluation, but since I have no hurry in exchanging it back (and tbh might as well just leave it there and use it whenever I am home) I don’t see this as a problem. I usually send money back home when the rate is favourable anyway.

Do you think this sort of strategy would at least somehow hedge the value of my money, or is there anything I am missing out?



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