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Short-term T-bill rates lower

WASHINGTON -- Interest rates on short-term Treasury securities fell in yesterday's auction.

The Treasury Department sold $19 billion in three-month bills at a discount rate of 1.68 percent, down from 1.69 percent last week. An additional $17 billion was sold in six-month bills at a rate of 1.96 percent, down from 1.99 percent.

The three-month rate was the lowest since Sept. 13 when the bills sold for 1.64 percent. The six-month rate was the lowest since Sept. 27 when the rate was 1.95 percent.

The new discount rates understate the actual return to investors -- 1.71 percent for three-month bills with a $10,000 bill selling for $9,957.53 and 2.00 percent for a six-month bill selling for $9,901.16.

Separately, the Federal Reserve said the average yield for one-year constant maturity Treasury bills, a popular index for making changes in adjustable rate mortgages, rose to 2.24 percent last week from 2.20 percent the previous week.

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