Interest rates on short-term T-bills fell sharply.

The Treasury Department sold $6.8 billion in new three-month bills at an average discount rate of 6.36%, down from 6.52% last week. Another $6.8 billion was sold in six-month bills at an average discount rate of 6.43%, down from 6.55% last week. The rates were the lowest since three-month bills averaged 6.32% on May 15, 1978, and six-month bills sold for 6.42% on Dec. 30, 1977. The new discount rates understate the actual return to investors--6.56% for three-month bills with a $10,000 bill selling for $9,839.20 and 6.74% for six-month bills selling for $9,674.90. The discount rate reflects the price discount received when government securities are purchased at less than face value.