BANKING & FINANCE - April 26, 1994

Short-Term T-Bill Rates Rise to 2-Year High: The Treasury Department sold $11.4 billion of new three-month bills at an average discount rate of 3.85%, up from 3.76% last week. Another $11.4 billion of new six-month bills was sold at an average discount rate of 4.25%, up from 4.21%. The three-month bill rate was the highest since they sold for 3.95% on April 6, 1992. The six-month bill rate was the highest since they averaged 4.27% on April 27, 1992. The new discount rates understate the actual return to investors: 3.94% for three-month bills, with a $10,000 bill selling for $9,902.70, and 4.40% for a six-month bill selling for $9,785.10. The discount rate reflects the price discount received when government securities are purchased at less than face value.

T-Bill Auction

3-month: 3.85%

6-month: 4.25%