BANKING & FINANCE - March 12, 1996

Short-Term T-Bill Rates Rise: The Treasury Department sold $12.7 billion in three-month bills at an average discount rate of 4.95%, up from 4.89% last week. An additional $12.7 billion was sold in six-month bills at an average discount rate of 5%, up from 4.80%. The three-month bill rate is the highest since the bills sold for 5.01% on Jan. 29. The six-month rate is the highest since the bills averaged 5.02% on Jan. 9. The new discount rates understate the actual return to investors: 5.08% for three-month bills, with a $10,000 bill selling for $9,874.90, and 5.20% for a six-month bill selling for $9,747.20. The Treasury will sell two-year and five-year notes on March 27 and 28, respectively. Separately, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.15% last week from 5.14% the previous week.