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Aug 24, 6:19 PM EDT

Rates drop at weekly US Treasury bill auction


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WASHINGTON (AP) -- Interest rates on short-term Treasury bills fell in Monday's auction with rates on three-month bills dropping to their lowest level since late July.

The Treasury Department auctioned $24 billion in three-month bills at a discount rate of 0.050 percent, down from 0.105 percent last week. Another $24 billion in six-month bills was auctioned at a discount rate of 0.200 percent, down from 0.245 percent last week.

The three-month rate was the lowest since three-month bills averaged 0.030 percent on July 20. The six-month rate was the lowest since those bills averaged 0.165 percent on Aug. 3.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.72, while a six-month bill sold for $9,989.89. That would equal an annualized rate of 0.051 percent for the three-month bills and 0.204 percent for the six-month bills.

Separately, the Federal Reserve said Monday that the average yield for one-year Treasury bills, a popular index for making changes in adjustable rate mortgages, was 0.39 percent last week, unchanged from the previous week.

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