Gold bars. Photo | courtesy.
The Central Bank of Kenya (CBK) is considering adding gold to its foreign exchange reserves, aiming to diversify its holdings beyond the US dollar.
Kenya’s move is influenced by a broader de-dollarization trend, where countries seek to shield their economies from potential sanctions and currency volatility.
CBK Governor Kamau Thugge confirmed the move, saying a team is currently assessing the feasibility of increasing gold holdings.
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The shift comes amid rising global interest in gold as central banks seek to minimize exposure to geopolitical risks and currency concentration.
“The bank is reviewing options for diversifying reserve assets, and gold is among the alternatives being considered,” Thugge noted.
The objective is to reduce reliance on the US dollar and other currencies, thereby enhancing the country’s financial resilience.
Historically, Kenya’s gold reserves have been minimal. As of June 2022, the CBK held gold valued at Sh120.5 million, a figure that remained unchanged in quantity since 2020. This represents a mere 0.01 percent of the nation’s total reserves, which are predominantly composed of foreign currencies and US Treasury bills.
Kenya central bank gold reserves
According to the World Gold Council’s 2024 survey, 29 percent of central banks plan to increase their gold holdings within the next year the highest percentage since the survey’s inception in 2018. Currently, CBK gold reserves holds only 0.2 tonnes of gold worth approximately Sh278 million.
Gold, being a tangible asset with intrinsic value, offers a hedge against such risks.
