Interest costs to the government, as measured by weekly Treasury auctions of 13-week and 26-week bills, fell yesterday for the sixth time in the past seven weeks. Yesterday's bill rates were the lowest since Sept. 22, 1980.
The average discount rate on 13-week bills fell to 10.693 percent from 11.128 percent a week earlier. The investment rate, or equivalent coupon-issue yield, was 11.14 percent compared with 11.61 percent for the previous bill auction a week ago.
For 26-week bills, the discount rate was down to 10.972 percent from 11.51 percent. Equivalent coupon-issue yields declined to 11.78 percent from 12.39 percent a week ago. The Treasury sold $4.7 billion each of the 13-week and 26-week bills.
Discount rates understate actual investment yield because some of the price is refunded at the time of purchase, in effect.
Separately, the maximum rate on six-month money market certificates will fall to 12.455 percent for the week starting today from 13.161 percent last week. This rate is based on the average discount rate for the four most recent auctions of 26-week bills. The CDs are issued in denominations of $10,000 or more.
The Treasury results yesterday reflect a sharp decline in short-term interest rates over the past two months. As recently as early last month, the discount rate on 13-week bills was 14.206 percent.
The latest rates were the lowest since September 1980 when 13-week bills yielded 10.460 percent and 26-week bills yielded 10.824 percent.
The rates for "small savers" certificates, set last Monday, is 13.95 percent for thrift institutions and 13.70 percent for commercial banks.
Elsewhere yesterday, financial markets were mixed after the Federal Reserve Board eliminated a 2 percent surcharge on frequent bank borrowers. After an initial gain of about one-half point, government bonds with long maturities gave up the gains on average, but intermediate issues gained. Bond prices go up as interest rates fall.