Kenya Plans Gold Purchases To Diversify Foreign Reserves

KENYA is set to join a growing number of African countries increasing their gold holdings as part of efforts to diversify foreign exchange reserves, the Central Bank of Kenya (CBK) has announced.

Speaking at a news conference on Wednesday, CBK Governor Kamau Thugge said the bank anticipates purchasing gold to strengthen its reserve position and reduce exposure to external risks.

“We anticipate going into the purchase of gold as an extra buffer. This is something that we have indicated before; it is one of the ways of diversifying our holding of reserves,” Thugge said.

The move comes a day after the central bank cut its benchmark lending rate by 25 basis points to 8.75 per cent, in a bid to stimulate credit growth and support economic activity.

Kenya’s foreign exchange reserves stood at 12.46 billion dollars as of February 9, equivalent to 5.4 months of import cover, according to central bank data. Analysts say adding gold to the reserve mix could provide additional stability amid global market volatility and currency fluctuations.

Gold has increasingly become an attractive reserve asset for central banks worldwide, particularly in emerging markets seeking to hedge against geopolitical risks and inflation.

Kenya would join other African countries, including the Democratic Republic of Congo, Rwanda and Namibia, that have recently boosted their gold reserves as part of broader reserve management strategies.

Officials say the planned gold purchases reflect a long-term approach aimed at strengthening Kenya’s financial resilience and safeguarding its economy against external shocks.