Determinants of Liquidation of Government Securities Held by Banks in Uganda

This study analyzed the determinants of bank liquidation of government securities using panel logistic regression. The analysis showed that the liquidation of government securities by banks was motivated by reserve needs although some evidence of reluctance to borrow from the Central Bank was also noted. The main policy implications of the study include the need to minimize liquidity shortages in the interbank market and development of the secondary market as measures that can minimize liquidation of securities.