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Rates fall on short-term Treasury bills

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Associated Press / January 15, 2008

WASHINGTON - Interest rates on short-term Treasury bills fell in auction yesterday, with rates on six-month bills dropping to the lowest level in nearly three years.

The Treasury Department auctioned $20 billion in three-month bills at a discount rate of 3.080 percent, down from 3.180 percent last week. Another $18 billion in six-month bills was auctioned at a discount rate of 2.950 percent, down from 3.170 percent last week.

The three-month rate was the lowest since these bills averaged 3.000 percent on Dec. 17.

The six-month rate was the lowest since an average of 2.935 percent on March 7, 2005.

The discount rates reflect that the bills sell for less than their face value.

For a $10,000 bill, the three-month price was $9,922.14, while a six-month bill sold for $9,850.86.

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 3.04 percent last week, from 3.18 percent the previous week.

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