The Central Bank of Kenya (CBK) is actively looking into adding gold to its foreign exchange reserves as part of efforts to reduce reliance on traditional currencies like the US dollar.
This move comes after gold reached record high prices of $3,500 per ounce in April, primarily driven by the US-China trade tensions.
CBK’s governor Kamau Thugge, while speaking to Bloomberg TV on the sidelines of the spring meetings of the International Monetary Fund and World Bank, revealed a feasibility study is underway. However, he declined to set a specific timeline for implementation.
The primary motivation for this move is to diversify Kenya’s foreign reserves. Currently, the country’s reserves are mainly dominated by the US dollar, leaving the nation vulnerable to risks associated with currency fluctuations.
Gold is widely regarded as a safe-haven asset because its value tends to hold during periods of political or economic instability. Thus, it offers a reliable hedge against currency fluctuations while strengthening financial stability. Its
Currently, Kenya holds approximately 0.02 tonnes (20kg) of gold in its reserves. This constitutes a small percentage of Kenya’s total foreign exchange research, which stood at US$9.8 billion (Ksh 1.2 trillion) as of April 24, 2025.
Kenya’s consideration to increase its gold reserves aligns with a noticeable trend among central banks globally, particularly those in emerging markets. Economies like Russia and China have also been increasing their gold results in recent years.
The decision by the Central Bank of Kenya to add gold to its reserves reflects a strategic move to enhance the country’s financial resilience as the global economic environment becomes more complex.
Source: Bloomberg
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