BANKING & FINANCE - Sept. 4, 1996

Short-Term T-Bills Rise to Highest Level Since July: The Treasury Department sold $12.07 billion in three-month bills at an average discount rate of 5.19%, up from 5.07% last week. Another $12.09 billion was sold in six-month bills at an average rate of 5.38%, up from 5.16%. The three-month bill rate was the highest since they sold for 5.2% on July 29. The six-month bill rate was the highest since they averaged 5.41% on July 8. The new discount rates understate the actual return to investors: 5.33% for three-month bills, with a $10,000 bill selling for $9,868.80, and 5.61% for a six-month bill selling for $9,728.00. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.81% last week, up from 5.64% the previous week.

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T-Bill Auction

6 month: 5.38%

3 month: 5.19%