BANKING & FINANCE - May 17, 1994

Interest Rates on Treasury Bills Decline: The Treasury Department sold $12.1 billion of new three-month bills at an average discount rate of 4.22%, down from 4.32% last week. Another $12 billion of new six-month bills was sold at an average discount rate of 4.69%, down from 4.81%. The rates were the lowest since May 2 when the three-month bills sold for 4% and the six-month bills averaged 4.41%. The new discount rates understate the actual return to investors--4.33% for three-month bills with a $10,000 bill selling for $9,893.30 and 4.87% for a six-month bill selling for $9,762.90. The discount rate reflects the price discount received when government securities are purchased at less than face value.

T-Bill Auction

3-month: 4.22%

6-month: 4.69%