BANKING & FINANCE - Feb. 6, 1996

Short-Term T-Bill Rates Fall: Interest rates on short-term Treasury securities fell in auction to their lowest level in more than a year. The Treasury Department sold $16.2 billion in three-month bills at an average discount rate of 4.88%, down from 5.01% last week. An additional $16.4 billion was sold in six-month bills at an average discount rate of 4.79%, down from 4.90%. The three-month bill rate was the lowest since they sold for 4.79% on Sept. 26, 1994. The six-month bill rate was the lowest since they averaged 4.75% on Aug. 1, 1994. The new discount rates understate the actual return to investors: 5.03% for three-month bills, with a $10,000 bill selling for $9,876.60, and 4.99% for a six-month bill selling for $9,757.80. The Treasury will sell three-year, 10-year and 30-year securities today, Wednesday and Thursday, respectively. Two-year notes will be sold on Feb. 27 and five-year notes on Feb. 28.