Kenya Turns to Bank of England for Gold in Bid to Protect Economy
Kenya is currently engaged in negotiations with the Bank of England (BOE) to diversify its foreign reserves by incorporating gold.
Parts of the conversation the Kenyan government is having with the Bank of England concerning its plans to buy gold include bullion storage.
Given the rapid rise in gold prices this year, Kenya has joined the list of countries looking to capitalize on the surge.
The East African country has set out to boost its gold reserves as some of its economists see it as more stable than the U.S dollar.
As seen in a report by Bloomberg, this plan has already been initiated by Zambia and Ghana, with Rwanda and Uganda looking to follow suit.
“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,” Central Bank of Kenya Governor Kamau Thugge said in an interview in Washington.
“I’m hoping that we can do it as soon as is practical because we’re ready to move.”
The Central Bank governor went on to note that Kenya’s gold plan “is not an intention to diversify away from dollars per se, but basically to diversify our foreign holdings.”
Investors’ projections for more interest cuts from the Federal Reserve contributed to gold’s historic run, but the increasing amount of debt in developed nations has also raised concerns.
Thugge was a little cautious due to the soaring prices, which had risen to almost $4,200 an ounce.
“Those who got in early have made a killing,” Thugge stated..
“Those who get in late can also be killed. So it’s important that we hold a level where, should there be a reversal in the price of gold, it doesn’t really have a huge impact on our holdings,” he added.
Midway into the year, Kenya stood as one of the few African countries with a sizable gold reserve.
This is due to the fact that having gold reserves helps many African economies become less dependent on foreign currencies and increase their monetary autonomy.
In line with global trends observed in China and India, nations such as South Sudan, Zimbabwe, and Nigeria are said to have initiated plans to increase their reserves, to join countries like Algeria and Libya, which have massive gold reserves.
A report by WGC revealed that about 20 central banks intend to boost their gold holdings this year.
In Africa, top reserve holders are frequently resource-rich or gold-producing states such as Ghana, Egypt, and Tunisia.
Kenya manages to squeeze itself into this group, having the continent’s 7th largest gold reserve, at 0.02 tonnes.
Given the rise in gold prices and an initiative to increase holdings on local resources currently sweeping Africa, Ghana plans to commence local gold refining and introduce fire assay operations in October 2025.
This is coming shortly after the West African Gold Coast announced plans to curb illegal gold mining, which has caused environmental damage and stressed local communities, by making it harder for Chinese citizens to obtain visas.
