- The Central Bank of Kenya (CBK) joined other central banks across Africa in the rush for gold reserves
- CBK governor Kamau Thugge noted the country wants to diversify its reserves, hence its interest in gold
- Kenya’s gold reserves rose by 40.8% to KSh 238 million in the fiscal year that ended in June 2025 from KSh 169 million in 2024
TUKO.co.ke journalist Japhet Ruto has over eight years of experience in financial, business, and technology reporting, offering insights into Kenyan and global economic trends.
In an attempt to diversify away from the dollar, the Central Bank of Kenya (CBK) is joining other central banks worldwide in the scramble for gold reserves.
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Gold has gained more than 50% in 2025, reaching a record $4,300 (KSh 555,400) per troy ounce, making it the best year since 1979.
This increase is partly due to investors’ purchasing of the precious metal as a result of worries about inflation and the increasing levels of debt.
What is the value of CBK’s gold reserves?
According to CBK data, gold holdings experienced one of the biggest percentage rises in recent years, rising by 40.8% to KSh 238 million in the fiscal year that ended in June 2025 from KSh 169 million in 2024.
Business Daily reported that the price of gold increased from around $1,950 (approximately KSh 251,900) per troy ounce to $3,700 (about KSh 478,000) between June 2024 and June 2025, indicating that the price increase contributed to a portion of the increase in CBK holdings.
Currently, less than 1% of Kenya’s reserves are made up of gold, with the majority of holdings being in conventional assets like the US dollar.
Why is CBK turning to gold?
Geopolitical economist Aly-Khan Satchu explained to TUKO.co.ke the dynamics behind the surge in gold prices and why it’s becoming increasingly important for countries like Kenya to hold significant amounts of gold in their reserves.
He revealed that the surge in gold prices is driven by central bank purchases across the world.
“The impulse behind the surge in the gold price (which is a tier one asset) has been largely one of outsize Central Bank buying. The early buyers (who, like the governor said, “have made a killing) were those sovereigns who were caught in the sanctions warfare crossfire and those who felt at risk of being caught in that same dollar sanction warfare. Today, Gold held by Central Banks has overtaken holdings of US Treasuries. My belief is we are still in the first innings of the move,” Satchu stated.
The economist believes that Kenya should hold up to 20% of its reserves in gold.
“Therefore, notwithstanding that we have seen a substantial uplift in the price, it makes Kenya hold up to 20% of its reserves in Gold. Most countries are self-custodising their gold. It is considered imprudent from a sovereignty view to hold gold at the Bank of England, especially after the Venezuela imbroglio,” he added.
The CBK governor Kamau Thugge noted the country wants to diversify its reserves, hence its interest in gold.
The CBK has kept the majority of its reserves in foreign currencies, particularly the US dollar, for many years, just as the majority of African central banks.
The ongoing strength of the global currency, falling interest rates, and increased global unpredictability have forced CBK to consider assets that can react more effectively to value amid volatility.
“The CBK is actively seeking to diversify its long-term reserves portfolio and views gold as a valuable part of the reserve strategy,” Thugge said.
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Kenya is one of the African countries with sizeable gold reserves in Africa.
African economies with gold reserves gain more monetary autonomy and become less reliant on foreign currencies.
According to Business Insider Africa, countries such as South Sudan, Zimbabwe, and Nigeria have started plans to expand their gold reserves to join Algeria and Libya, which have enormous reserves, in keeping with global trends seen in China and India.
What is the value of Kenya’s forex reserves?
The CBK’s latest bulletin revealed that foreign exchange reserves remained adequate at $12,072 million (KSh 1.6 trillion).
This represented 5.3 months of import cover and surpassed the threshold of four months of imports.
This came after remittance inflows to the country rose by 0.2% in September to $419.6 million (KSh 54.2 billion).
Proofreading by Jackson Otukho, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
