BANKING & FINANCE - July 6, 1994

Treasury Bill Rates Rise: The Treasury Department sold $12 billion of new three-month bills at an average discount rate of 4.31%, up from 4.20% last week. Another $12.1 billion of new six-month bills was sold at an average discount rate of 4.74%, up from 4.60%. The three-month bill rate was the highest since they were sold at 4.32% on May 9. The six-month bill rate was the highest since May 9, when it averaged 4.60%. The new discount rates understate the actual return to investors: 4.42% for three-month bills, with a $10,000 bill selling for $9,891.10, and 4.92% for a six-month bill selling for $9,760.40. The discount rate reflects the price discount received when government securities are purchased at less than face value.

T-Bill Auction

3-month: 4.31%

6-month: 4.74%