BoU’s latest treasury bill auction attracts Shs1.18 trillion in bids

The Bank of Uganda’s latest Treasury bills auction attracted bids worth more than Shs1.18 trillion, nearly four times the Shs350 billion on offer, underscoring sustained investor appetite for government securities despite modest movements in yields.

Results released by the central bank on Thursday show investors submitted bids worth Shs1.179 trillion across the three tenors—91-day, 182-day and 364-day Treasury bills. However, the government accepted bids worth Shs441.8 billion, exceeding the amount initially offered.

The one-year Treasury bill attracted the highest demand, accounting for Shs933.9 billion of the total bids received against an offer of Shs300 billion. The Bank accepted Shs357.1 billion in bids for the instrument.

The 182-day paper received bids worth Shs140.5 billion against an offer of Shs35 billion, while the 91-day bill attracted Shs104.6 billion in bids compared to Shs15 billion offered.

The auction results indicate that demand remained strongest for the shorter-dated securities, with the 91-day Treasury bill recording the highest bid-to-cover ratio of 5.93, followed by 2.62 for the one-year paper and 2.09 for the 182-day bill.

The Bank of Uganda set the annual discount rates at 9.76 per cent for the 91-day bill, 9.89 per cent for the 182-day paper and 10.32 per cent for the 364-day Treasury bill. The corresponding money market yields were 10.00 per cent, 10.40 per cent and 11.50 per cent, respectively.

Treasury bills are short-term government debt instruments issued by the Bank of Uganda on behalf of the government to finance budget requirements and support monetary policy operations. The securities are widely held by commercial banks, pension funds, institutional investors and individuals seeking low-risk investment opportunities.

The auction was conducted on July 8, with settlement scheduled for July 9.