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Rates on short-term Treasury bills fall

WASHINGTON - Interest rates on short-term Treasury bills fell in yesterday's auction to the lowest levels in three weeks.

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 3.800 percent, down from 4.350 percent last week. Another $15 billion in six-month bills was auctioned at a discount rate of 4.020 percent, down from 4.380 percent last week.

The three-month rate was the lowest since three-month bills averaged 2.850 percent on Aug. 20. The six-month rate was the lowest since 3.950 percent, also on Aug. 20.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,903.94 while a six-month bill sold for $9,796.77.

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 4.27 percent last week from 4.30 percent the previous week.

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