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INTEREST RATES ON T-BILLS INCREASE

SHARE INTEREST RATES ON T-BILLS INCREASE

Interest rates on short-term Treasury securities rose in this week's auction to the highest level in four weeks.

The Treasury Department sold $12.4 billion in three-month bills at an average discount rate of 4.43 percent, up from 4.35 percent last week. Another $12.5 billion was sold in six-month bills at an average discount rate of 4.93 percent, up from 4.75 percent.The three-month bill rate was the highest since they sold for 4.50 percent on July 11. The six-month bill rate was the highest since they averaged 4.94 percent the same day.

The new discount rates understate the actual return to investors - 4.54 percent for three-month bills with a $10,000 bill selling for $9,888 and 5.13 percent for a six-month bill selling for $9,750.80.

In a separate report, the Federal Reserve said Monday that the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 5.41 percent last week from 5.51 percent the previous week.