Kenya has entered discussions with the Bank of England (BoE) as part of plans to expand and diversify its foreign reserves through gold acquisitions. Central Bank of Kenya (CBK) Governor Kamau Thugge confirmed in an interview with Bloomberg that the talks are centered on bullion storage options as the country prepares to invest in the precious metal.
“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,” said Thugge, adding that the CBK is “ready to move as soon as is practical.”
The initiative comes as gold prices have more than doubled over the past two years, reaching record highs of over $4,200 (Ksh542,640) an ounce. The surge has been fueled by investor expectations of U.S. Federal Reserve interest rate cuts and growing global debt levels.
Thugge clarified that Kenya’s move is not an attempt to shift away from the U.S. dollar but rather a strategic diversification of the country’s foreign holdings. Kenya’s foreign reserves currently stand at around $11 billion (Ksh1.4 trillion), from which the gold purchases will be financed. However, Thugge declined to disclose the specific portion that would be converted into gold.
While acknowledging the potential rewards of gold investment, the CBK Governor also urged caution given the metal’s volatility. “Those who got in early have made a killing. Those who get in late can also be killed,” he noted, emphasizing the need to maintain a balance that would minimize losses if gold prices decline.
The Bank of England, one of the world’s oldest central banks established in 1694, serves as the United Kingdom’s primary institution for monetary policy and financial stability. It also manages foreign exchange and reserve assets for various countries, making it a strategic partner for Kenya’s diversification plans.
