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CBK increases gold holdings by 40.8 percent
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.
The Central Bank of Kenya (CBK) increased gold holdings by 40.8 percent to Sh238 million in the financial year ended June 2025, signalling a renewed push to diversify the country’s foreign reserves amid global economic uncertainty.
CBK's latest annual report shows that the value of gold held by the bank rose from Sh169 million the previous year, marking one of the largest percentage increases in recent times.
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.
The Sh69 million rise in gold reserves in a single year is more than the Sh63 million that CBK had added over a four-year period to June 2024.
This comes months after CBK governor Kamau Thugge said in April this year that the bank was “actively considering” adding gold to its reserves beyond the dollar and other currencies.
The latest accumulation signals the bank’s cautious effort to strengthen its balance sheet with stable, non-sovereign assets. 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 CBK’s decision reflects broader shifts in global reserve management. Central banks across emerging markets have been increasing gold holdings as a safeguard against geopolitical risks and currency depreciation.
The timing of the accumulation coincides with a surge in international gold prices amid slowing global growth and elevated tensions in major commodity markets. The increase in value may therefore reflect both additional purchases and price revaluation of existing holdings.
Gold is now up more than 50 percent this year, to a record $4,000 (Sh516,700) a troy ounce, marking the best year since 1979, partly as investors worried about inflation and soaring debt levels pile into the precious metal.
Between June and October, there has been a 22.8 percent jump in price to over $4,100 per troy ounce, meaning that CBK’s holding could now be valued at about Sh292.26 million.
Central banks have accumulated over 1,000 tonnes of gold in each of the last three years, up significantly from the 400 to 500 tonnes average over the preceding decade, according to World Gold Council—a London-headquartered international trade association for the gold industry.
“This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers and investors alike,” said the Council in its 2025 Central Bank Gold Reserves survey conducted between February and May this year.
This marked acceleration in the pace of accumulation has occurred against a backdrop of geopolitical and economic uncertainty, which has clouded the outlook for reserve managers and investors alike.
The share of gold in Kenya’s reserves is however still way under one percent, given that foreign exchange reserves closed June 25 at an all-time high of US$ 11.08 billion (Sh1.431 trillion).
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.
