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T-bill interest rates climb

WASHINGTON -- Interest rates on short-term Treasury bills rose in yesterday's auction with rates on six-month bills climbing to the highest level in more than five years.

The Treasury Department auctioned $15 billion in three-month bills at a discount rate of 4.720 percent, up from 4.705 percent last week. Another $14 billion in six-month bills was auctioned at a discount rate of 4.840 percent, up from 4.810 percent last week.

The three-month rate was the highest since three-month bills averaged 4.740 percent on May 15. The six-month rate was the highest since these bills averaged 4.920 percent on Jan. 22, 2001.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,880.69 while a six-month bill sold for $9,755.31.

Separately, the Federal Reserve said the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, edged up to 4.99 percent last week from 4.98 percent the previous week.

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