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Rates on short-term Treasury bills rise

WASHINGTON -- Interest rates on short-term Treasury bills rose in yesterday's auction to the highest levels in more than five years.

The Treasury Department auctioned $14 billion in three-month bills at a discount rate of 4.600 percent, up from 4.570 percent last week. Another $13 billion in six-month bills was auctioned at a discount rate of 4.750 percent, up from 4.700 percent last week.

The three-month rate was the highest since these bills averaged 4.700 percent on March 5, 2001. The six-month rate was the highest since these bills averaged 4.770 percent on Feb. 20, 2001.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,883.72 while a six-month bill sold for $9,759.86.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, rose to 4.91 percent last week from 4.85 percent the previous week.

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