BANKING & FINANCE - Dec. 24, 1991

Treasury Bill Rates Hit 19-Year Low: Interest rates on short-term Treasury securities fell in Monday’s auction to the lowest level in 19 years. The Treasury Department sold $10.2 billion in three-month bills at an average discount rate of 3.75%, down from 4.14% last week. Another $10.2 billion was sold in six-month bills at an average discount rate of 3.85%, down from 4.19% last week. The three-month bill rate was the lowest since they sold for 3.699% on May 15, 1972. The six-month bill rate was the lowest since they averaged 3.796% on March 6, 1972. The new discount rates understate the actual return to investors--3.85% for three-month bills, with a $10,000 bill selling for $9,905.20, and 3.99% for a six-month bill selling for $9,805.40. In a separate report, the Federal Reserve said the average yield for one-year Treasury bills, the most popular index for making changes in adjustable rate mortgages, fell to 4.35% last week from 4.44% the previous week.