BANKING & FINANCE - May 14, 1996

Short-Term T-Bill Rates Unchanged: The Treasury Department sold $13.6 billion in three-month bills at an average discount rate of 5.02%. Another $13.7 billion was sold in six-month bills at an average discount rate of 5.14%. The three-month bill rate was the highest since they sold for 5.03% on April 8. The six-month bill rate was the highest since they averaged 5.19%, also on April 8. The new discount rates understate the actual return to investors: 5.16% for three-month bills, with a $10,000 bill selling for $9,873.10, and 5.35% for a six-month bill selling for $9,740.10. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.67% last week from 5.63% the previous week. The Treasury announced it will auction two-year notes on May 29 and five-year notes on May 30.

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T-Bill Auction (May 13)

6-month: 5.14%

3-month: 5.02%