Kenya is actively exploring the addition of gold to its foreign exchange reserves as a strategy to diversify beyond the US dollar and other major currencies, Central Bank of Kenya (CBK) Governor Kamau Thugge has revealed.
Speaking to Bloomberg TV on the sidelines of the International Monetary Fund (IMF) and World Bank Spring Meetings in Washington, Thugge stated that a dedicated team is assessing the feasibility of this move. However, no specific timeline has been set.
Thugge was responding to a question on whether the Central Bank of Kenya is considering diversifying its reserves by including gold, as several other central banks worldwide have done.
“It’s definitely something we have considered for a while, and we are really looking into it,” Thugge said.
“We basically have a group that is assessing the feasibility of this matter. Indeed, this is something we are actively considering. But I don’t want to set a timeline for it.”
Also Read: CBK Explains Why Company Bank Loans Have Increased in 2025
Why CBK is Actively Considering Buying Gold
He added, “The need to diversify our foreign reserves away from other currencies and include gold is one of the main reasons why we are considering this direction.”
Kenya’s foreign reserves are currently dominated by the US dollar, with only 0.02 tonnes (20 kg) of gold held as of the latest data.
By increasing its gold reserves, the CBK aims to hedge against currency volatility and strengthen financial stability.
The CBK’s gold reserve plans align with ongoing legislative efforts to formalize Kenya’s gold sector.
Parliament is currently reviewing a bill to establish a Gold Processing Corporation, which would oversee and streamline the country’s gold trade.
This initiative could boost local gold production, curb illicit outflows, and potentially support the CBK’s reserve strategy.
Also Read: CBK Announces Plans to Change Lending Rate Model
Gold Demand Reaches Record High in 2024, Driven by Central Bank Purchases
With a 29% year-to-date rally, gold has become one of the top-performing assets as investors abandon trade-war-exposed stocks.
Global central banks and investors are accumulating gold in large quantities, driving prices to new highs.
Since the start of 2024, factors such as central banks diversifying reserves to hedge against dollar risks and guard against sanctions have fueled this upward trend.
Additionally, inflows into gold-backed exchange-traded funds (ETFs) have been rising recently.
Countries like China, Russia, and India have been aggressively accumulating gold, reducing reliance on the US dollar amid geopolitical shifts and economic sanctions.
The World Gold Council’s Q4 and Full Year 2024 Gold Demand Trends report revealed that total annual gold demand (including OTC) reached a record high of 4,974 tonnes, driven by sustained central bank buying and growth in investment demand.
The combination of record-high gold prices and volumes led to the highest-ever total value of demand at $382 billion.
Central banks continued their strong purchasing pace in 2024, with purchases exceeding 1,000 tonnes for the third consecutive year.
In Q4, buying surged significantly, reaching 333 tonnes, bringing the annual total for central bank purchases to 1,045 tonnes.
Follow our WhatsApp Channel and X Account for real-time news updates.
