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NEW YORK, May 2 (Reuters) - Interest rates on U.S. Treasury bills rose modestly on Wednesday after the Treasury Department said it planned to introduce a two-month debt issue later this year in an effort to raise more money to fund a growing federal deficit.
The Treasury, which had been widely expected to add a new short-dated maturity, did not offer details on the timing and size of its first two-month bill auction.
Wednesday’s two-month T-bill plan was part of the Treasury’s quarterly refunding announcement for next week when it will sell $73 billion in three-year, 10-year and 30-year debt, raising $33.9 billion in new cash.
“Where the refunding was interesting was that the Treasury confirmed that a 2-month bill would be introduced later this year, but the key operational detail of when such a bill would settle was left to the imagination of market participants,” Aaron Kohli, interest rates strategist at BMO Capital Markets wrote in a research note.
At 10:52 a.m. (1452 GMT), the interest rate on one-month bills was up 1 basis point at 1.66 percent, while the three-month bill rate was little changed at 1.820 percent, Reuters data showed. (Reporting by Richard Leong Editing by Chizu Nomiyama)