BANKING & FINANCE - April 16, 1996

Short-Term Treasury Rates Fall: Interest rates on short-term Treasury securities fell in auction. The Treasury Department sold $10.5 billion in three-month bills at an average discount rate of 4.87%, down from 5.03% last week. Another $10.5 billion was sold in six-month bills at an average discount rate of 5.03%, down from 5.19%. The three-month bill rate was the lowest since they sold for 4.86% on Feb. 26. The six-month bill rate was the lowest since they averaged 4.97% on March 25. The new discount rates understate the actual return to investors--5% for three-month bills with a $10,000 bill selling for $9,876.90 and 5.23% for a six-month bill selling for $9,745.70. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.62% last week from 5.48%. The Treasury will sell two-year and five-year notes on April 23 and April 24, respectively.