Nov. 12 (Bloomberg) -- The Treasury sold $34 billion in four-week bills at the lowest rate since it first auctioned the securities in 2001 amid persistent demand for the safety of U.S. debt during the worst credit crisis since the Great Depression.

The bills were sold at a high discount rate of 0.07 percent. At last week's auction, the bills drew a rate of 0.32 percent. The government received bids for the bills totaling more than triple the amount sold.

Yields on government securities have plummeted this year as investors have gravitated toward their safety as stocks and emerging-market assets plunged. Yields on three-month Treasury bills, viewed as a haven in times of turmoil, fell 27 basis points today to 0.15 percent, the lowest in almost a month.

The rate on four-week bills peaked at 5.175 percent on Jan. 29, 2007. The government began issuing the four-week bills in July 2001, according to Stephen Meyerhardt, a spokesman for the Bureau of Public Debt in Washington. The bills are intended to reduce the government's reliance on irregularly issued cash management bills.

Treasury Secretary Henry Paulson said today that he plans to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit, scrapping an effort to buy devalued mortgage assets.

Credit rates remain elevated as banks are less willing to lend. The three-month London interbank offered rate for dollars was 2.13 percent today, 113 basis points more than the Federal Reserve's target rate for overnight bank loans. The average was 16 basis points in the seven years to August 2007.

At today's auction, 13.9 percent of the bids were allotted at the high discount rate of 0.07 percent. The low rate submitted was zero percent, the median rate was zero percent, and the investment rate was 0.071 percent. The price was 99.994556.

Indirect bidders, a group that includes foreign central banks, bought 34 percent of the amount sold, compared with 38.9 percent in the prior auction. Primary dealers that trade directly with the Fed bought 64.5 percent, compared with 59.6 percent in the previous sale. Direct bidders purchased 1.5 percent.

To contact the reporter on this story: Andy Burt in Washington at aburt1@bloomberg.net; Michael J. Moore in New York at mmoore55@bloomberg.net.

Last Updated: November 12, 2008 15:43 EST