By In a surprising but strategic pivot, the Central Bank of Kenya (CBK) has joined a global wave of gold-buying that’s redefining the structure of monetary reserves worldwide. The move signals a dramatic departure from the long-standing tradition of holding mainly US dollars — a shift that reflects Kenya’s growing concerns over currency volatility, inflation, and geopolitical unpredictability.
As gold prices surge to record highs in 2025, the CBK’s gold reserves have increased significantly, marking one of the biggest percentage gains in recent years. But what’s driving this sudden interest in the yellow metal? And how does Kenya’s strategy compare with other nations, especially across Africa?
In this in-depth article, we’ll unpack the truth behind CBK gold reserves, explore the global dynamics fueling this gold rush, and analyze what this bold move could mean for Kenya’s financial future.
Understanding CBK’s Renewed Focus on Gold Reserves
The Shift from Dollar Dominance to Diversification
For decades, Kenya — like many African economies — has leaned heavily on the US dollar as the backbone of its foreign reserves. This reliance made strategic sense in a relatively stable geopolitical landscape, where the greenback reigned supreme as a global reserve currency. However, in recent years, the ground beneath that foundation has begun to shift.
Global financial systems are becoming increasingly fractured. Trade wars, sanctions, and monetary tightening cycles in the US have made the dollar a source of both strength and vulnerability. Central banks worldwide are responding by diversifying their portfolios — and gold has emerged as a preferred asset. It’s not just about value preservation; it’s about autonomy, security, and hedging against geopolitical risk.
Enter the CBK gold reserves play.
In 2025, the Central Bank of Kenya finally acknowledged what others had seen coming: overreliance on any single currency, even the mighty dollar, is a risk in today’s unstable world. By increasing gold holdings, the CBK is effectively building a monetary insurance policy — one that doesn’t depend on the whims of any foreign government or central bank.
Gold doesn’t default. It isn’t subject to sanctions. It doesn’t rely on third-party promises. In a world where currency manipulation and interest rate changes can send shockwaves through developing economies, gold offers something priceless: predictability.
Why Now? Timing and Global Signals
The CBK’s decision is more than just a reaction to Kenya’s internal pressures — it’s a calculated response to a global shift in central banking philosophy. According to the World Gold Council, 2023 and 2024 marked the highest levels of gold buying by central banks since record-keeping began, with countries like China, India, and Turkey leading the charge.
These nations aren’t just amassing gold for fun — they’re repositioning themselves in a post-dollar world where sovereignty and economic self-defense matter more than ever. The CBK’s pivot to gold in 2025 mirrors this trend, placing Kenya in the company of forward-looking economies.
And the timing couldn’t be more strategic. With gold prices reaching $4,300 (Sh555,400) per troy ounce — the highest since 1979 — it may seem like CBK is buying at the peak. But central banks don’t trade gold like investors. Their strategy is long-term. It’s about balance sheet resilience, not quarterly gains.
Furthermore, domestic pressures played a role. After the Kenyan shilling lost nearly a quarter of its value against the dollar in 2023, the cracks in the dollar-centric reserve model became painfully visible. Diversification wasn’t just desirable — it became essential.
The move is also symbolic. It signals to global markets that Kenya is not standing still, waiting to be rocked by the next financial wave. It’s assertively stepping into a new reserve strategy — one that favors durability, not dependency.
How CBK Gold Reserves Have Grown in 2025
Latest Data: Value and Percentage Surge
The numbers are in, and they tell a compelling story. The CBK gold reserves experienced a remarkable 40.8% surge in value over the 2024–2025 financial year — rising from Sh169 million to Sh238 million. This jump isn’t just significant in relative terms; it marks one of the largest annual increases Kenya has seen in gold holdings in modern history.
So, what does this really mean?
For starters, the actual volume of gold held by CBK may not have changed drastically, but the value of those holdings has increased sharply. This is largely due to the bullish global gold market. Gold prices climbed from $1,950 (about Sh251,900) per troy ounce in mid-2024 to a staggering $3,700 (Sh478,000) by June 2025. That’s a jump of nearly 90% in market value, and it played a crucial role in lifting the total worth of Kenya’s gold reserves.
Yet, even with this surge, gold still makes up less than 1% of Kenya’s total foreign reserves, which stand at approximately $12.07 billion (Sh1.559 trillion). This highlights just how cautious and conservative CBK’s approach has been. Unlike countries that have aggressively stocked up on the precious metal, Kenya is still in the early stages of integrating gold into its reserve portfolio.
This leaves plenty of room for expansion, especially as gold continues to be viewed as a safer and more independent store of value in the current global climate.
What’s Driving the Increase in Valuation?
While gold’s rising price is the most obvious driver, there’s more beneath the surface.
The global economic environment has been riddled with inflation pressures, currency depreciation, and fiscal instability — especially in developing markets. Investors and central banks alike have responded by fleeing to tangible, stable assets. Gold, known for its intrinsic value and universal recognition, fits that bill perfectly.
But there’s also a strategic story here. CBK’s gradual increase in gold holdings reflects a deliberate pivot toward resilience. As central banks from China to Poland shift away from the dollar, Kenya is aligning itself with this forward-thinking cohort — albeit cautiously.
Moreover, the surge in valuation is not just a “paper gain.” It strengthens the CBK’s balance sheet, providing Kenya with additional leverage in times of foreign exchange pressure, or during sovereign debt negotiations. A stronger reserve position can also boost investor confidence, especially for a country that has recently faced foreign exchange shortages and fiscal challenges.
Looking forward, CBK’s next move could be to gradually increase the actual volume of gold it holds — moving beyond passive gains from market appreciation to active diversification of its reserves
