Uganda Government generates Shs5.4 trillion from sale of treasury bills, bonds in three months

The Government of Uganda through the Bank of Uganda generated Shs5.4 trillion from the sale of treasury bills and bonds in the three months of July, August and September.

According to the Bank of Uganda’s Monetary Policy Report for October 2024, the Shs.5.4 trillion in the three months to September 2024 is about 69% higher than the Shs.3.2 trillion generated in the three months to June 2024.

According to the report, yields in the primary market for treasury bills and bonds rose across all tenors in the three months to September 2024, even with administrative cutoffs relative to the three months to June 2024, due to an increase in domestic financing of fiscal deficits.

“Demand for government securities remained high with all auctions oversubscribed, pointing to strong appetite for investments in government paper,” the report indicates.

In the secondary market, yields rose on the short end but fell on the long end, signifying investor confidence on the economy and expectation for higher relative return, the report states.

Treasury bills are government securities issued for periods of 91 days, 182 days and 365 days (3, 6 and 12 months respectively). Interest on these securities is paid at maturity with principal. Treasury bonds are government securities with the longest maturity ranging from periods of 2, 3, 5, 10 and 15 years.