Strong demand lifts BoU Treasury bill sales to Shs465b

KAMPALA — Strong investor demand for government debt pushed the Bank of Uganda’s Treasury bill sales to Shs465.89 billion on Wednesday, more than doubling the Shs350 billion initially offered.

The September 2 auction attracted Shs804.08 billion in bids across the 91-day, 182-day and 364-day Treasury bills, reflecting strong appetite for short-term government securities.

The 364-day Treasury bill accounted for the bulk of the demand, attracting Shs626.71 billion in bids against an initial offer of Shs300 billion. The central bank accepted Shs441.83 billion, comprising Shs439.53 billion in competitive bids and Shs2.31 billion in non-competitive bids.

The bill was priced at 90.115, translating into an annualised discount rate of 9.912 per cent and a money-market yield of 10.999 per cent. Its effective yield was 11.001 per cent, with maturity set for September 2, 2027.

The strong demand for the longer-dated bill contrasts with the relatively smaller amounts accepted for the shorter tenors.

The 91-day Treasury bill attracted Shs62.1 billion in bids against an offer of Shs15 billion. BoU accepted Shs7.09 billion, comprising Shs5.29 billion in competitive bids and Shs1.80 billion in non-competitive bids.

The cut-off price was 97.627, giving an annualised discount rate of 9.518 per cent, a money-market yield of 9.749 per cent and an effective yield of 10.112 per cent. The bills will mature on December 3, 2026.

The 182-day bill received Shs115.28 billion in bids against an offer of Shs35 billion. BoU accepted Shs16.98 billion, including Shs14.83 billion in competitive bids and Shs2.15 billion in non-competitive bids.

The cut-off price was 95.251, with an annualised discount rate of 9.524 per cent, a money-market yield of 9.999 per cent and an effective yield of 10.250 per cent. The bills mature on March 4, 2027.

The auction results indicate that investors were particularly keen on the 364-day securities, which offered an effective yield of about 11 per cent.

The overall demand of Shs804.08 billion was more than twice the amount initially offered, underscoring continued investor appetite for government securities.

All successful bids were settled on Thursday, September 3.