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imageNAIROBI: The Kenyan shilling was little changed against the dollar on Thursday and traders said they expected it to trade with a weakening bias in coming days due to scant dollar supply.

Traders said the shilling was unlikely to be moved by the central bank's decision on Wednesday to hold its benchmark lending rate at 8.50 percent, in line with what traders had earlier expected. The rate has remained unchanged since May 2013.

At 0730 GMT, commercial banks quoted the shilling at 88.65/75, compared with Wednesday's close of 88.70/80.

"It's a bit stable now, but so far low (dollar) supply is hurting the shilling," said Julius Kiriinya, trader at African Banking Corporation.

The shilling has come under pressure due to falling dollar inflows from the tourism sector.

Kenya's tourism business, a top foreign exchange earner, slid into crisis this year because of frequent deadly attacks blamed on Islamists from neighbouring Somalia.

Tea dollar earnings have also fallen due to an oversupply of the commodity as a result of favourable weather in Kenya.

Dollar demand was also rising because a funding crunch had eased after government renewed spending, and some traders said it was increasingly likely the central bank would enter the market as it did last week on Tuesday to sell dollars to shore up the weakening local currency.

Copyright Reuters, 2014

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