BANKING & FINANCE - Feb. 23, 1994

Treasury Bill Rates Hit Highest Level in 20 Months: The Treasury Department sold $12.3 billion in new three-month bills at an average discount rate of 3.33%, up from 3.28% last week. Another $12.3 billion in new six-month bills was sold at an average discount rate of 3.53%, up from 3.43%. The three-month bill rate was the highest since they sold for 3.59% on June 29, 1992. The six-month bill rate was the highest since they averaged 3.66% that same day. The new discount rates understate the actual return to investors: 3.41% for three-month bills, with a $10,000 bill selling for $9,915.80, and 3.64% for a six-month bill selling for $9,821.50. The discount rate reflects the price discount received when government securities are purchased at less than face value.

T-Bill Auction

Feb. 21 6-month: 3.53% 3-month: 3.33%