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Short-term T-bill rates mixed

WASHINGTON - Interest rates on short-term Treasury bills were mixed in auction yesterday with rates on three-month bills rising while six-month bills dropped to the lowest level in two years.

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 3.920 percent, up from 3.900 percent last week. Another $18 billion in six-month bills was auctioned at a discount rate of 3.945 percent, down from 3.990 percent last week.

The three-month rate was the highest since these bills averaged 4.185 percent two weeks ago. The six-month rate was the lowest since these bills averaged 3.870 percent on Oct. 3, 2005.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,900.91 while a six-month bill sold for $9,800.56.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, fell to 3.97 percent last week from 4.14 percent the previous week.

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