BANKING & FINANCE - May 11, 1993

Treasury Bill Rates Rise: The Treasury sold $11.7 billion of new three-month bills at an average discount rate of 2.89%, up from 2.88% last week. Another $11.6 billion of new six-month bills was sold at an average discount rate of 2.99%, up from 2.98% last week. The three-month bill rate was the highest since they sold for 2.89% on April 12. The previous high was 2.92% on April 7. The six-month bill rate was the highest since they averaged 3.00%, also on April 12. The new discount rates understate the actual return to investors--2.95% for three-month bills with a $10,000 bill selling for $9,926.90 and 3.08% for a six-month bill selling for $9,848.00. The discount rate reflects the price discount received when government securities are purchased at less than face value.