BANKING & FINANCE - Oct. 8, 1996

Rates Fall on Short-Term T-Bills: Interest rates on short-term Treasury securities fell in auction to the lowest level in nearly six months. The Treasury Department sold $13.1 billion in three-month bills at an average discount rate of 4.96%, down from 5.01% last week. Another $13.1 billion was sold in six-month bills at an average rate of 5.07%, down from 5.17%. The three-month bill rate was the lowest since they sold for 4.87% on April 15. The six-month bill rate was the lowest since they averaged 5.02% on April 22. The new discount rates understate the actual return to investors: 5.09% for three-month bills, with a $10,000 bill selling for $9,874.60, and 5.28% for a six-month bill selling for $9,743.70.