Bank of Uganda Takes Only Shs 210.6 Billion in April Bond Auction

On April 16, 2025, the Bank of Uganda (BoU) raised Shs 210.6 billion during a government bond auction, even though investors had submitted bids worth Shs 1.33 trillion. This shows that the central bank is taking a cautious approach to control interest rates and manage liquidity in the economy.

The auction involved three types of government bonds. These included a 2-year bond maturing on July 9, 2026, a 5-year bond maturing on August 23, 2029, and a 15-year bond maturing on June 23, 2039.

The most popular bond was the 15-year one, which offered the highest return of 17.00 percent. Investors submitted bids totaling Shs 666.3 billion for it. However, only Shs 28.97 billion was accepted, and all of it came through non-competitive bidding. In this method, investors agree to take whatever interest rate the auction gives, with no need to negotiate pricing.

The 2-year bond attracted Shs 290.1 billion in bids. Its cut-off price was 101.139, resulting in a yield of 15.75 percent. Out of these bids, the Bank of Uganda accepted Shs 56.6 billion, with most of it, about Shs 55.4 billion, coming from competitive bids. In competitive bidding, investors name the interest rate they are willing to accept.

For the 5-year bond, the yield was 16.50 percent, and the cut-off price was 95.052. This bond got Shs 374.9 billion in offers, and the central bank took in Shs 125.1 billion. Out of this, Shs 114.3 billion came from competitive bids.

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The bid to cover ratio, which shows how strong the demand is compared to what was accepted, was highest for the 15-year bond at 23.00. That means for every one shilling accepted, there were 23 shillings offered. The 2-year bond had a ratio of 5.12, and the 5-year bond had a ratio of 2.99. A higher ratio usually means strong investor interest.

Even though the total amount offered across the three bonds was Shs 990 billion, the Bank of Uganda chose to accept only Shs 210.6 billion. All accepted bids will be settled on April 17, 2025.

Analysts say this auction proves there is strong investor demand for Uganda’s government bonds, especially those with longer terms. It may also show that investors believe in the country’s long-term economic stability and financial planning.