BANKING & FINANCE - March 28, 1995

Treasury Bill Rates Fall: Interest rates on short-term Treasury securities fell to their lowest levels of the year. The Treasury Department sold $12.1 billion of new three-month bills at an average discount rate of 5.64%, down from 5.76% last week. Another $12 billion of new six-month bills were sold at an average discount rate of 5.80%, down from 5.91%. The three-month bill rate was the lowest since it averaged 5.56% on Dec. 27. The six-month bill rate was the lowest since it averaged 5.72% on Nov. 14. The new discount rates understate the actual return to investors: 5.82% for three-month bills, with a $10,000 bill selling for $9,857.40, and 6.07% for a six-month bill selling for $9,706.80. The discount rate reflects the price discount received when government securities are purchased at less than face value. Please see chart, D7.