BANKING & FINANCE - Aug. 23, 1994

3-Month T-Bill Rates Climb to Nearly 3-Year High: The Treasury Department sold $12.22 billion of new three-month bills at an average discount rate of 4.62%, up from 4.59% last week. Another $12.33 billion of new six-month bills was sold at an average discount rate of 4.98%, down from 4.99%. The three-month bill rate was the highest since they sold for 4.59% on Nov. 12, 1991. The six-month bill rate was the lowest since they averaged 4.93% two weeks ago. The new discount rates understate the actual return to investors: 4.74% for three-month bills, with a $10,000 bill selling for $9,881.90, and 5.18% for a six-month bill selling for $9,748.20. The discount rate reflects the price discount received when government securities are purchased at less than face value.

T-Bill Auction

3-month: 4.62%

6-month: 4.98%