BANKING & FINANCE - Sept. 4, 1991

Rates Fall at T-Bill Auction: The Treasury sold $10.6 billion of new three-month bills at an average discount rate of 5.34%, down from 5.40% last week. Another $10.6 billion of new six-month bills were sold at an average discount rate of 5.39%, down from 5.47% last week. The three-month bill rate was the lowest since they sold for 5.17% on Aug. 19. The six-month bill rate was the lowest since they averaged 5.23%, also on Aug. 19. The new discount rates understate the actual return to investors--5.50% for three-month bills, with a $10,000 bill selling for $9,865.00, and 5.63% for a six-month bill selling for $9,727.50. The discount rate reflects the price discount received when the securities are purchased at less than face value.

T-Bill Auction 6-month: 5.39% 3-month: 5.34%