BANKING & FINANCE - July 12, 1994

Interest Rates Rise on Treasury Bills: The Treasury Department sold $12 billion of new three-month bills at an average discount rate of 4.50%, up from 4.31% last week. Another $12.1 billion of new six-month bills was sold at an average discount rate of 4.94%, up from 4.74%. The three-month bill rate was the highest since they sold for 4.58% on Nov. 18, 1991. The six-month bill rate was the highest since they averaged 5.04% on Oct. 28, 1991. The new discount rates understate the actual return to investors: 4.61% for three-month bills, with a $10,000 bill selling for $9,886.30, and 5.14% for a six-month bill selling for $9,750.30. The discount rate reflects the price discount received when government securities are purchased at less than face value.

T-Bill Auction

3-month: 4.50%

6-month: 4.94%