Treasury Bills

QUOTE AND NEWS
The Economic Times  Aug 17  Comment 
T-bills are short-term securities issued on behalf of the government by the RBI and are used in managing liquidity for the government.
MarketWatch  Aug 5  Comment 
The Treasury is ‘very concerned’ it has to trim the size of T-bill auctions in order to avoid hitting the debt ceiling, a department official said Wednesday.
The Economic Times  Jun 10  Comment 
RBI is selling 150 billion rupees ($2.35 billion) of treasury bills, including 90 billion rupees of 91-day t-bills and 60 billion rupees of 364-day t-bills.
The Times of India  May 20  Comment 
Wednesday’s Treasury bill auctions — in which the RBI sold a larger amount of the government papers and that, too, at a lower yield compared to last week’s — is a strong indication that bond market players are factoring in a monetary...




 
TOP CONTRIBUTORS

The graph to the left is the discount rate for T-Bills with a 3-month maturity.

Treasury bills are short-term debt securities issued by the U.S. Government. They are issued in lengths of four weeks (30 days), three months (90 days), six months (180 days), and one year (360 days). However, the one year bill is currently no longer issued. Treasury bills are known as a zero coupon, or discount security, since it pays the interest and principal at maturity.

The rates listed on Treasury bills are known as discount rates. However, it is important know two things when purchasing Treasury bills:

  1. The discount rate is annualized
  2. The Treasury assumes that a year has 360 days

Formula

Image:Treasury_Bill_Discount.png


Image:Treasury_Bill_Yield.png

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