BANKING & FINANCE - Aug. 20, 1996

Rates Rise on Short-Term T-Bills: The Treasury Department sold $12.7 billion in three-month bills at an average discount rate of 5.06%, up from 5.04% last week. Another $12.5 billion was sold in six-month bills at an average rate of 5.13%, up from 5.08%. The three-month bill rate was the highest since they sold for 5.08% on Aug. 5. The six-month bill rate was the highest since they averaged 5.34% on July 29. The new discount rates understate the actual return to investors--5.20% for three-month bills with a $10,000 bill selling for $9,872.10 and 5.34% for a six-month bill selling for $9,740.70. In a separate report, the Federal Reserve Board said the average yield for one-year Treasury bills rose to 5.62% last week from 5.60% the previous week.

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T-Bill Auction

August 19

6-month: 5.13%

3-month: 5.06%