Actualities of personal finance using through the market of domestic government borrowing in wartime conditions

Zhukov Andriy
Postgraduate Student of Finance Department, Taras Shevchenko National University of Kyiv, Ukraine, e-mail: Andrey@zhukov.eu, ORCID ID: https://orcid.org/0009-0000-9313-1998

Cite this article:

Zhukov, А. (2024). Actualities of personal finance using through the market of domestic government borrowing in wartime conditions [Aktualitety vykorystannia personalnykh finansiv cherez rynok vnutrishnikh derzhavnykh zapozychen v umovakh viiny], Socio-economic research bulletin, Vìsnik socìal’no-ekonomìčnih doslìdžen’ (ISSN 2313-4569), Odessa National Economic University, Odessa, No. 1-2 (88-89), pp. 58-75.

Abstract

The article investigates actualities as conceptual foundations for attracting and using of personal finances in the development of domestic government borrowing market. It is noted that among the most significant actualities are: the average yields of domestic government bonds (DGBs) in national and foreign currencies; inflation and inflationary expectations, devaluation or revaluation of the national currency; changes in the National Bank of Ukraine’s interest rates; default risk and debt restructuring for DGBs, especially in foreign currencies. The essence of «personal finances» concept and its correlation with the concepts of «individual investors» and «individual investing» is determined. The division of individual investors into groups is justified taking into account the characteristics of each, and the stages for the formation and implementation of individual investment policy in the domestic government borrowing market are proposed. The relationship between individual investors and other participants in the domestic government borrowing market is investigated, based on which it was established that the driving force that prompts the transformation of personal savings into investments in the purchase of government bonds is a motivational component. An analysis of the DGBs volume denominated in hryvnia and foreign currencies and owned by individual investors at the beginning of 2020-2024 is conducted. It was established that during the analyzed period, the share of bonds owned by individual investors relative to the total issuance of DGBs increased almost threefold, but still remains relatively low enough to solve the problems of reducing the state budget deficit, economic recovery, and funding the defense budget. This indicates that the investment potential of personal finances in the domestic government borrowing market is not fully utilized and requires the development of an effective strategy to attract individual investments, considering the behavioral saving and investment policies of potential investors, needs of the economy and defense in the war conditions. The activity of individual investors in the DGB’s market is an indicator of public-private partnership development, market relations, and civil society formation. Based on this, at the state level, it is necessary to develop a policy of personal finance attracting for investment in the development of the domestic government borrowing market of Ukraine, taking into account the existing of individual savings potential, the volume of private remittances from abroad and cash foreign currency held by the population.

Keywords

personal finances; actualities; individual investors; the market of internal state borrowing; bonds; financial instruments; risks.

JEL classification: D100; D330; E220; G110; H560; DOI:https://doi.org/10.33987/vsed.1-2(88-89).2024.58-75

UD classification: 366.2:336.767

This work is licensed under a Creative Commons Attribution 4.0 International License. To view a copy of this license, visit http://creativecommons.org/licenses/by/4.0/

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