Rwanda to Add Gold to Foreign Reserves Portfolio in Next Fiscal Year

The National Bank of Rwanda (BNR) will start adding gold to its foreign reserves. This change will begin in the next fiscal year. It aligns with a trend among East African central banks to diversify their assets.

Central Bank Governor Soraya Hakuziyaremye confirmed this on May 15. She spoke during the quarterly monetary policy committee update. This update reviews recent economic developments and potential interventions.

Hakuziyaremye stated, "This is a new asset class for us." She added that their current view on gold is positive.

The Central Bank board has approved adding gold to the portfolio. This will start in July, when the new financial year begins.

The decision reflects a regional shift noted by the East African Community Monetary Affairs Committee. Many central banks in the region are accumulating gold as part of their strategies.

Hakuziyaremye mentioned that BNR has studied gold's viability as a reserve asset. The study looked at its ability to counter external shocks and maintain liquidity. It also assessed gold's potential to preserve capital during market stress.

She said, "Our foreign reserve objectives focus on capital preservation and liquidity." Gold meets all these criteria currently.

The Bank has not revealed how much gold it will acquire yet. Officials indicated that allocation steps will begin in the upcoming fiscal year. More details are expected by year-end.

Globally, central banks have increased gold purchases over the past two years. Concerns about inflation and currency volatility drive demand for non-dollar reserve assets.