BANKING & FINANCE - Oct. 6, 1992

Treasury Bill Yields Keep Dropping: Interest rates on short-term Treasury securities fell to their lowest level in 30 years. The Treasury Department sold $10.2 billion in three-month bills at an average discount rate of 2.67%, and $10.2 billion in six-month bills at an average discount rate of 2.78%. The rates were the lowest since 1962. The discount rates understate the actual return to investors--2.73% for three-month bills, with a $10,000 bill selling for $9,932.50, and 2.86% for a six-month bill selling for $9,859.50. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 3.02% last week, down from 3.16% the previous week.