Interest costs to the government, as measured by weekly Treasury auctions of 13-week and 26-week bills, tumbled yesterday for the second time this week. The yields to investors were at the lowest levels since June 15 and capped a week of broad declines in short-term interest rates.
The average discount rate on 13-week bills fell to 13.526 percent from 14.206 percent on Monday. The investment rate, or equivalent coupon-issue yield, was 14.20 percent compared with 14.94 percent for the previous bill auction this week.
For 26-week bills, the discount rate was down to 13.5 percent from 14.218 percent last Monday. Equivalent coupon-issue yields declined to 14.69 percent from 15.53 percent. Treasury sold $4.5 billion each of the 13-week and 26-week bills.
The auction was held yesterday because next Monday is Columbus Day.
The new six-month T-bill rate, plus a quarter of a percentage point, is 13 3/4 percent, the highest rate banks and thrift institutions may pay on six-month money market certificates issued in denominations of $10,000 or more effective immediately. The previous ceiling for these certificates was 14.468 percent.