Kenya Central Bank is ‘Actively Considering’ Buying Gold
(Bloomberg) — Kenya is considering adding gold to its reserves to diversify its foreign exchange holdings beyond the US dollar and other currencies, according to the country’s central bank governor.
“We have basically a group that is looking at the feasibility of doing it and yes, that’s something that we’re actively considering,” Kamau Thugge said Thursday in an interview with Bloomberg TV in Washington, on the sidelines of the International Monetary Fund and World Bank Spring Meetings. “I wouldn’t want to put a time-line to it.”
Central banks and investors around the world are stockpiling gold, pushing prices to a record. The precious metal’s ferocious run began in early 2024, aided by central banks diversifying holdings to hedge against the dollar and insulate themselves from the threat of sanctions. More recently, flows into bullion-backed exchange-traded funds have picked up.
The East African economy is also seeking a new IMF program “in the same format as the previous one,” Thugge said. The concessional element of the funds and the policy package attached to them makes it “a good package in the current context of elevated global risks.”
A four-year $3.6 billion IMF program was prematurely terminated in March, leading Kenya to forgo about $850 million after it failed to meet certain targets.
The nation has previously said it’s asking the IMF for more “realistic” program targets to avoid the type of deadly protests that accompanied last year’s tax plans.
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“I do expect that the finance bill for this year will also have taken into account what happened last year,” Thugge said.
The nation isn’t “planning and expecting to go to the international capital markets for a while,” following a eurobond issue last month that helped it rearrange some debt, he said.
Kenya has a “deep local financial market” that can help finance its budget and is also looking to others, such as the Middle East, for loans, the governor said.
The governor said he is optimistic about economic growth this year despite new risks emerging from US President Donald Trump’s trade war.
The central bank sees the economy growing “at a much faster pace” than last year’s estimated growth of about 4.6% and only foresees US tariffs on trading partners shaving 0.2% off its economic growth, according to the governor.
He anticipates this year’s growth to be underpinned by its agriculture sector thanks to favorable weather conditions and lower interest rates stimulating investment and consumption.
Last year’s “pressures have eased, and we have started to ease monetary policy,” Thugge said.
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