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Rates dip at weekly US Treasury bill auction

WASHINGTON – Interest rates on short-term Treasury bills fell in Monday’s auction, with six-month bills falling to their lowest level in three weeks.

The Treasury Department auctioned $42 billion in three-month bills at a discount rate of 0.340 per cent, down from 0.360 per cent last week. Another $36 billion in six-month bills was auctioned at a discount rate of 0.470 per cent, down from 0.495 per cent last week.

The three-month rate was the lowest since three-month bills averaged 0.310 per cent two weeks ago on Oct. 3. The six-month rate was the lowest since those bills averaged 0.420 per cent three weeks ago on Sept. 26.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,991.41, while a six-month bill sold for $9,976.24. That would equal an annualized rate of 0.345 per cent for the three-month bills and 0.478 per cent 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, edged down to 0.66 per cent last Friday after starting the week at 0.69 per cent on Monday, Oct. 10.