The Central Bank of Kenya (CBK) is scouting for vaults to store gold as it moves to diversify the country’s foreign reserves, amid global economic uncertainty that has seen the price of the precious metal hit record levels.
CBK Governor Kamau Thugge told Bloomberg News the bank has already opened talks with international financial institutions, including the Bank of England, on the logistics of acquiring and storing gold.
Dr Thugge did not specify the quantities being sought but said the move was in order to “diversify our foreign holdings.”
Currently, the share of gold in Kenya’s $12.07 billion (Sh1.559 trillion) reserves is way under one percent, leaving most of the holdings in traditional assets such as the US dollar.
Gold is now up more than 50 percent this year, to a record $4,300 (Sh555,400) a troy ounce, marking the best year since 1979, partly as investors worried about inflation and soaring debt levels pile into the precious metal.
“We’ve talked to the Bank of England and other banks to see how we go about it — where it will be stored... I’m hoping that we can do it as soon as is practical because we’re ready to move.,” Dr Thugge told Bloomberg News last week.
In April, the CBK Governor said the bank was “actively considering” adding gold to its reserves beyond the dollar and other currencies.
The CBK move aligns with a global trend of central banks turning to the precious metal as a hedge against currency volatility and inflationary pressures. Gold also allows central banks to diversify from assets such as dollar reserves.
Central banks have accumulated over 1,000 tonnes of gold in each of the last three years, up significantly from the 400 to 500 tonnes average over the preceding decade, according to World Gold Council—a London-headquartered international trade association for the gold industry.
“This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers and investors alike,” said the Council in its 2025 Central Bank Gold Reserves survey conducted between February and May this year.
This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers and investors alike.
CBK data shows the value of gold holdings surged by 40.8 percent to Sh238 million in the financial year ended June 2025 from Sh169 million the previous year, marking one of the largest percentage increases in recent years.
Between June and October, there has been about 24 percent jump in price to over $4,300 per troy ounce meaning that CBK’s holding could now be valued at more than Sh295 million.
Dr Thugge said while CBK looks to enhance the gold holdings, it will be cautious not to accumulate too much and take a hit should there be a big tumble in the price of the precious metal.
“Those who got in early have made a killing. Those who get in late can also be killed. So it’s important that we hold a level where, should there be a reversal in the price of gold, it doesn’t really have a huge impact on our holdings,” he told Bloomberg News.
Gold, unlike foreign currencies or government securities, is not directly affected by policy decisions in major economies, making it an attractive store of value during periods of financial stress.
The planned accumulation of gold holdings coincides with a surge in international gold prices amid slowing global growth and elevated tensions in major commodity markets.
Geopolitical events have laid a solid foundation for gold to become prominent in the reserve portfolios of central banks, and as a way to settle payments for some countries, according to Official Monetary and Financial Institutions Forum (OMFIF)— an independent think tank for central banking, economic policy and public investment.
“Increasingly, central banks are holding gold as a hedge against volatility and geopolitical risk. This will continue to enhance gold’s role in the monetary system,” says OMFIF.
Kenya joins several African economies, including Ghana, Nigeria and South Africa, that have recently expanded their gold reserves to reduce reliance on the US dollar.
The measured entry into the gold market suggests a growing recognition of the need for balance between liquidity, safety and long-term value preservation in national reserves.
