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BRIEFLY

November 17, 1987

Interest rates on short-term T-bills rose at the latest auction to the highest levels in four weeks. The Treasury sold $6.4 billion in new three-month bills at an average discount rate of 6.01%, up from 5.74% last week. Another $6.4 billion was sold in new six-month bills at an average discount rate of 6.33%, up from 6.24% last week. The rates were the highest since Oct. 19, when three-month bills sold for 6.84% and six-month bills averaged 7.21%. The new discount rates understate the actual return to investors--6.20% for three-month bills, with a $10,000 bill selling for $9,848.10, and 6.65% for six-month bills selling for $9,680.00. The discount rate reflects the price discount received when government securities are purchased at less than face value.

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