WASHINGTON The Treasury yesterday sold $17.22 billion of twoyear notes at a yield of 6.88%, up from the 6.55% yield incurred in the previous auction on Sept. 27 and the highest since the 6.94% incurred on July 31, 1991.

The Treasury classified yesterday's issue as a reopening of the 6 7/8% five year notes originally issued Oct. 31, 1991. The price was 99.991.

In the Dutch auction, all competitive tenders at yields below 6.88% were accepted in full,

Buyers who bid at the high yield of 6.88% were allotted 10% of their total bids. The median yield was 6.85%, and the low yield was 6.80%.

Tenders totaled $41.59 billion and the Treasury accepted $17.22 billion, including $1.29 billion of noncompetitive bids.

Federal Reserve banks bought $1.08 billion of the secttrifles, as agents for feign and international monetary authorities, in exchange for maturing secuffties. The Fed banks also bought $450 million for their own account in exchange for maturing securities.

The notes will mature Oct, 31, 1996.

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