Overview:
In Auction No. 1228 held on Wednesday, May 6, 2026, the central bank sought to raise Shs355 billion, but received bids worth Shs626.2 billion, reflecting sustained liquidity in the money market and continued investor confidence in government securities.
KAMPALA — The Bank of Uganda’s latest Treasury bill auction has recorded strong investor appetite, with total bids significantly exceeding the government’s target borrowing across all maturities.
In Auction No. 1228 held on Wednesday, May 6, 2026, the central bank sought to raise Shs355 billion, but received bids worth Shs626.2 billion, reflecting sustained liquidity in the money market and continued investor confidence in government securities.
Investor interest was particularly strong in the 364-day Treasury bill, which attracted bids of Shs438.7 billion against an offer of Shs255 billion. The Bank of Uganda, however, accepted Shs260.8 billion in line with its borrowing plan.
The one-year paper also continued to offer the highest return, closing at an effective yield of 12.243 percent, reflecting the upward trend in interest rates on longer-term government debt.
All three tenors registered higher returns, signalling tightening liquidity conditions and increased pricing pressure on government borrowing.
| Maturity | Maturity Date | Cut-off Price | Effective Yield |
|---|---|---|---|
| 91-day | August 6, 2026 | 97.449 | 10.921% |
| 182-day | November 5, 2026 | 94.800 | 11.304% |
| 364-day | May 6, 2027 | 89.121 | 12.243% |
The auction was also characterised by robust bid-to-cover ratios, particularly in the six-month paper, which attracted the highest competition.
The 91-day bill recorded Shs54.1 billion accepted against a bid-to-cover ratio of 1.52, while the 182-day paper saw Shs36.0 billion accepted with a ratio of 2.92. The 364-day bill attracted Shs260.8 billion, with a bid-to-cover ratio of 1.68.
The 182-day Treasury bill emerged as the most competitive segment, with bids nearly three times the amount accepted by the central bank.
Non-competitive bids, often submitted by retail and smaller institutional investors, were fully allotted across all maturities, amounting to approximately Shs4.78 billion.
Successful bidders are expected to settle payments by Thursday, May 7, 2026.
Analysts say the results reflect continued demand for low-risk government instruments, even as yields gradually rise in response to monetary conditions.