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Rates fall at weekly US Treasury auction

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[January 03, 2013]  WASHINGTON (AP) -- Interest rates on short-term Treasury bills fell in Wednesday's auction to the lowest levels in two weeks.

The Treasury Department auctioned $32 billion in three-month bills at a discount rate of 0.075 percent, down from 0.085 percent last week. Another $28 billion in six-month bills was auctioned at a discount rate of 0.120 percent, down from 0.130 percent last week.

The three-month rate was the lowest since three-month bills averaged 0.040 percent on Dec. 17. The six-month rate was the lowest since these bills averaged 0.090 percent, also on Dec. 17.

The discount rates reflect that the bills sell for less than face value. For a $10,000 bill, the three-month price was $9,998.10 while a six-month bill sold for $9,993.90. That would equal an annualized rate of 0.076 percent for the three-month bills and 0.122 percent for the six-month bills.

The auction for three-month and six-month Treasury bills, which normally occurs on Monday, was delayed this week so that the auction could occur after the New Year's holiday.

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Separately, the Federal Reserve said that the average yield for one-year Treasury bills, a popular index for making changes in adjustable-rate mortgages, edged up to 0.16 percent last week from 0.15 percent the previous week.

[Associated Press]

Copyright 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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