Short-term T-bill rates increased

WASHINGTON - Interest rates on short-term Treasury bills rose in auction yesterday to the highest levels in two weeks.

The Treasury Department auctioned $26 billion in three-month bills at a discount rate of 1.690 percent, up from 1.685 percent last week. Another $25 billion in six-month bills was auctioned at a discount rate of 1.900 percent, up from 1.890 percent last week.

The three-month rate was the highest since these bills averaged 1.710 percent on Aug. 25. The six-month rate was the highest since 1.925 percent, also on Aug. 25.

The discount rates reflect the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,957.28 while a six-month bill sold for $9,903.94. That would equal an annualized rate of 1.721 percent for the three-month bills and 1.945 percent for the six-month bills.

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 2.08 percent last week from 2.17 percent the previous week.