What Is Treasury Bills?
A Treasury Bill (T-Bill) is a short-term Uganda government debt obligation backed by the Treasury Department with a maturity of one year or less. Treasury bills are usually sold in denominations of Uganda 3554.98. However, some can reach a maximum denomination of Ugx 17774.90 million in non-competitive bids.
How does an individual buy Treasury bills?
You can buy bills from us in Treasury Direct. You can also buy them through a bank or broker. (We no longer sell bills in Legacy Treasury Direct, which we are phasing out.) You can hold a bill until it matures or sell it before it matures.
- – You initiate request and comply with requirements above
- – Account officer verifies documents and forwards to treasury
- – Treasury raises deal slip and forwards to Trops
- – Customers account is debited in line with deal slip instructions
- – Contract certificates are generated
- – Short term negotiable bill of exchange.
- – Used by Governments to help finance national borrowing requirements
- – Quoted for purchase/sale in the secondary market on an annual percentage yield to maturity.
- – Issued at discount.
- – Short term debt instrument
- – Issued at zero coupon rates i.e. no interest paid during life-cycle of the bill.
- – Issued in fixed tenures i.e. 91days, 182days and 364days.
- – Primary dealers or investment bankers may underwrite it.
- – Interest is paid upfront
- – T-bills qualify as liquid assets for the purpose of liquidity ratio computation.
- – Used as collateral securities for repurchase transactions
- – Interest received not subject to tax
- – Repayment guaranteed at maturity
What is the current treasury bill rate in Uganda?
The Uganda 10Y Government Bond has a 14.165% yield.
Uganda Government Bonds – Yields Curve.
|Central Bank Rate||6.50%|
How do bonds work in Uganda?
They may be issued at par value, at a discount (below face value) or at a premium (above face value). Investors in Treasury Bonds are paid a fixed coupon interest amount every 6 months based on the face value of the bond until maturity. The investor could also earn interest by buying bonds at a discount.
How much is a Treasury bond in Uganda?
The minimum amount needed to buy Treasury Bills/Bonds is UGX.100,000 (One hundred thousand shillings only) and are issued in multiples of UGX 100,000.
Are Treasury bills taxed in Uganda?
Withholding tax and interest rate calculations
Withholding tax (WHT) of 20% (and 10% for 10-year and longer maturity bonds) is charged on all interest earned on Treasury bills and bonds on all investors except those that are explicitly exempted by Uganda Revenue Authority and/or other regulatory authorities.