The Central Bank of Kenya (CBK) can now expand the country's holdings of gold and other precious metals after a new law broadened its powers to manage Kenya's official reserves, marking a significant shift in the country's reserve management framework.

🇰🇪 Breaking It Down

The new legal framework allows the CBK to buy, sell, import, export and hold gold and other precious metals as part of its reserve management strategy.

The move gives the central bank greater flexibility to diversify its reserve assets alongside traditional holdings such as foreign currencies and government securities.

The change is expected to strengthen Kenya's reserve management by giving the CBK more options to protect the country's reserves against global economic uncertainty and financial market volatility.

📌 What You Need to Know

Gold is widely regarded by central banks around the world as a safe-haven asset that can help preserve value during periods of market turbulence.

The changes follow President William Ruto's assent to the Central Bank of Kenya (Amendment) Act, 2026, on Monday. The new law introduces a raft of reforms aimed at strengthening the country's financial system and aligning the CBK's operations with international best practices.

Beyond reserve management, the Act formally establishes an Emergency Liquidity Assistance (ELA) framework, giving the CBK a clear legal basis to provide temporary financial support to solvent but cash-strapped banks during periods of financial stress.

The framework is intended to prevent liquidity shortages from escalating into wider banking crises by enabling the central bank to respond quickly when financial institutions face temporary funding challenges.

The law also expands the CBK's mandate by making the promotion of financial stability an explicit objective alongside maintaining price stability.

In addition, the Act strengthens the CBK's powers to intervene in troubled banks before their financial difficulties worsen, allowing earlier supervisory action aimed at protecting depositors and preserving confidence in the banking sector.

📰 Source: Kenyans.co.ke