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U.S. sells T-bills at highest interest rates since Dec

The U.S. Treasury Department on Monday paid the highest interest rates since December to investors on $52 billion of bills in advance of a policy meeting of the Federal Reserve where traders will watch for clues about a possible interest rate increase.

The Treasury sold $26 billion of three-month bills at an interest rate of 0.040 percent, the highest level since Dec. 29, Treasury data showed.

Last week, it sold $26 billion of three-month T-bills at an interest rate of 0.015 percent.

The ratio of bids submitted to the amount of three-month T-bills offered was 3.69, the lowest level since Oct. 15, 2013.

Last week's bid-to-cover ratio that gauges overall demand at an auction was 4.18.

Meanwhile, the Treasury sold $26 billion of six-month bills at an interest rate of 0.145 percent, the highest since Dec. 22. Last week, it paid an interest rate of 0.095 percent.

The bid-to-cover ratio of the latest six-month T-bill auction was 3.59, down from last week's 3.96 and the lowest since Oct. 15, 2013.

In early October 2013, the U.S. government entered into partial shutdown as the White House and top Republican lawmakers wrangled over whether to raise the statutory federal debt ceiling. Traders feared if the debt limit were not increased by Oct. 17, 2013, the United States would delay paying its interest and principal on its debt, risking default and wreaking chaos across financial markets.

http://in.reuters.com/article/2015/03/16/auction-usa-tbills-idINL2N0WI19P20150316