Government of Uganda through the Central Bank has raised over Shs1.3 trillion in the sale of treasury bonds for October 2024.
According to the results of the Treasury Bond Auction done on Wednesday, October 30, the Bank of Uganda collected over Shs330 billion from the bonds maturing in two years, about Shs550 billion from the 5-year bonds and about Shs480 billion from those maturing in 15 years.
The two-year bond is trading at 15.7% while that of 5 years is at 16% and is currently trading at around 15.5% in the secondary market. The 15-year bond has reached 16.75% in the primary market, reaching levels of the 20-year bond in recent months. In the secondary market, it’s currently trading at 16.2-16.3%.
This comes after 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.
Treasury auctions are designed to minimize the cost of financing the national debt by promoting broad, competitive bidding and liquid secondary market trading.
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.
