Wamuzi News Ke
In a dramatic turn in national reserve policy, Kenya has entered advanced talks with the Bank of England (BoE) to store newly acquired bullion as part of a bold push to diversify its foreign reserves. The development marks a potentially historic shift in how Kenya safeguards its wealth holdings.
Central Bank of Kenya (CBK) Governor Kamau Thugge confirmed the discussions in a recent interview with Bloomberg, revealing that the country is weighing gold storage options abroad and scrutinising custodial arrangements.
“We’ve talked to the Bank of England and other banks to see how we go about it — where it will be stored, those kinds of things,” Thugge said. —Rationale: Beyond the Dollar, Towards StabilityKenya’s foreign reserves currently stand at around US$11 billion (KSh 1.4 trillion), primarily held in dollar-denominated assets.
The proposed pivot does not represent a wholesale abandonment of the dollar, but an effort to rebalance risk — converting a portion of reserves into gold to act as a hedge against currency volatility. Thugge cautioned that timing and balance are critical.
He warned that late entry to gold markets carries risk: “Those who got in early have made a killing. Those who get in late can also be killed.” The CBK is thus exploring a cautious path — one that avoids excessive exposure to price reversals.
Technical and Strategic Hurdles Ahead.
While the vision is bold, the execution is fraught with challenge:Custody and insurance arrangements: Securing storage under safe terms is paramount. Any agreement must satisfy global standards for bullion security and insurance.
Transparent valuation and accounting: The public and markets will demand clear accounting for how gold is valued, reported, and audited.Liquidity versus asset rigidity: Gold is less liquid than fungible currency; deploying it in emergencies is more complex.
Price volatility risks: Gold’s rally has been steep this year, up more than 50%, but sharp reversals are possible. Policy legitimacy: The CBK must carry stakeholders — government, legislature, public — into its strategy to avoid accusations of opacity or risk-prone governance.
