BANKING & FINANCE - April 19, 1994

T-Bill Rates Hit Two-Year High: Interest rates on short-term Treasury securities rose in auction to the highest levels in more than two years. The Treasury Department sold $11.8 billion in three-month bills at an average discount rate of 3.76%, up from 3.63% last week. Another $11.8 billion was sold in six-month bills at an average discount rate of 4.21%, up from 4.03%. The rate for three-month bills was the highest since they sold for 3.95% on April 6, 1992. The six-month bill’s rate was the highest since it averaged 4.27% on March 23, 1992. The new discount rates understate the actual return to investors: 3.85% for three-month bills, with a $10,000 bill selling for $9,905, and 4.36% for a six-month bill selling for $9,787.20.

T-Bill Auction

3-month: 3.76%

6-month: 4.21%