Govt raises sh3.968 trillion from selling securities in July
The Ministry of Finance performance of the economy report for July 2026 says that of the total amount raised, sh401.33 billion was from treasury bills, while sh3.567 trillion was from treasury bonds.
Govt raises sh3.968 trillion from selling securities in July
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At the start of the financial year 2026/27 in July, the Ugandan government raised sh3.968 trillion from four auctions of its securities, that is, one treasury bill and three treasury bonds.
The Ministry of Finance performance of the economy report for July 2026 says that of the total amount raised, sh401.33 billion was from treasury bills, while sh3.567 trillion was from treasury bonds.
All resources raised from the domestic market were used for refinancing maturing securities, says the report.
There was a general decline in yields (interest rates) on treasury bills across all tenors over the period.
Yields on the 91-day, 182-day and 364-day tenors declined to 10.4%, 10.7% and 11.5% in July from 10.9%, 11.2% and 12.0%, respectively, in a month earlier.
Just like the previous month, the report says investor appetite for the Government securities remained high, with all treasury bill auctions oversubscribed.
The average bid-to-cover ratio stood at 4.70, indicating that demand (investor bids) for the securities was nearly five times the amount offered and the highest over the last twenty-four months.
In July, the Government held auctions for all seven long-term (treasury bonds) tenors of Government securities, namely the 2-year, 3-year, 5-year, 10-year, 15-year, 20-year and 25-year bonds.
Similar to the treasury bills, yields (interest rates) on treasury bonds edged downwards in July in comparison to the rates registered in previous issuances of similar securities.
The decline in yields for both treasury bills and treasury bonds was mainly driven by stronger investor demand for the Government securities (as shown by the high bid-to-cover ratio), partly supported by the reinvestment of proceeds from maturing the Government securities into new issuances by market players.
Government securities are considered risk-free investments that provide returns and a consistent source of income over a specified period.
Analysts say investors who purchase these securities are effectively lending money to the Government, which repays them after a fixed period known as maturity.
They also note that investing in government securities is a straightforward process done through the Central Bank, commercial banks or investment banks.
Treasury bills are short-term government securities issued for 91 days, 182 days and 365 days (three, six and 12 months, respectively), with interest paid at maturity alongside the principal.
Treasury bonds are longer-term securities ranging from two to 15 years, with interest paid semi-annually and the principal repaid at maturity.