BANKING & FINANCE - April 18, 1995

T-Bill Rates Drop: Interest rates on short-term Treasury securities fell at auction to their lowest level in five months. The Treasury Department sold $11.6 billion worth of three-month bills at an average discount rate of 5.56%, down from 5.70% last week. Another $11.6 billion in six-month bills was sold at an average discount rate of 5.69%, down from 5.84%. The three-month bill rate was the lowest since they sold for 5.44% on Nov. 28. The six-month rate was the lowest since the bills averaged 5.68% on Nov. 7. The new rates understate the actual return to investors: 5.73% for three-month bills, with a $10,000 bill selling for $9,859.50, and 5.96% for a six-month bill selling for $9,712.30. Meanwhile, the Federal Reserve Board said the average yield for one-year T-bills, a popular index for making changes in adjustable-rate mortgages, fell to 6.28% last week from 6.38% the week before.