Kenya Exploring Gold to Hedge Against Currency Fluctuations

The Kenya Central Bank (CBK) is exploring adding gold to its foreign exchange reserves as part of a strategy to diversify away from traditional currencies, Governor Kamau Thugge has revealed.

In an interview with Bloomberg TV during the International Monetary Fund (IMF) and World Bank Spring Meetings in Washington, Thugge said a team is currently evaluating the feasibility of the move, though he did not commit to a specific timeline.

The move to add gold to Kenya’s reserves comes at a time when the precious metal has reached record highs, exceeding $3,500 an ounce – a 40% increase from a year earlier. Gold has become the top-performing major commodity this year [2025], fueled by geopolitical tensions, economic instability, and rising demand from central banks globally.

Kenya’s foreign exchange reserves are largely made up of U.S dollars, with just 0.02 tonnes (20 kg) of gold recorded in the latest data. By boosting its gold holdings, the CBK seeks to protect against currency fluctuations and enhance financial stability, aligning with a trend observed among central banks worldwide.

In recent years, African central banks have been taking steps to strengthen their gold reserves, positioning themselves favorably amidst global economic uncertainty.

In one of the latest such moves, the Bank of Uganda (BOU) has initiated a Domestic Gold Purchase Program with the aims of mitigating the declining foreign currency reserves and to buffer against ‘risks in the international financial markets.’

Uganda’s move is reminiscent of Zimbabwe’s initiatives to back its currency with gold, while South Africa, Nigeria, and Madagascar are either shoring up their gold holdings or considering doing so to protect their currencies and fight inflation.

Below is a list of the top 10 countries in Africa that lead in terms of gold reserves as of 2024:

• Algeria – 174 metric tons of gold
• South Africa – 125 metric tons
• Libya – 117 metric tons
• Egypt – 80.73 metric tons
• Morocco – 22.12 metric tons of gold
• Nigeria – 21.37 metric tons
• Mauritius – 12.44 metric tons of gold
• Ghana – 8.74 metric tons of gold
• Tunisia – 6.84 metric tons
• Mozambique – 3.94 metric tons of gold