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| 182-day T-bill auction avg disc rate |
| By Bankrate.com |
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This week |
Month ago |
Year ago |
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182-day T-bill auction avg disc rate
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1.100 |
1.900 |
4.095 |
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What it means:
The U.S. government issues short-term debt at a discount at a competitive
auction, usually on a weekly basis. At a discount means the note is
sold at a discount from face value and then redeemed at maturity at
the full face value. The difference between the discounted price and
the face value determines the yield. The yield on 182-day Treasury
bills is the average discount rate.
How it's used:
The rate is used as an index for various variable rate loans. Lenders
use such an index, which varies, to adjust interest rates as economic
conditions change. They then add a certain number of percentage points
called a margin, which doesn't vary, to the index to establish the
interest rate you must pay. When this index goes up, interest rates
on any loans tied to it also go up.
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