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imageNAIROBI: Kenya's shilling strengthened slightly on Wednesday helped by some dollar inflows from tea exports, but traders said the currency could face pressure again without central bank support.

At 0818 GMT, the shilling was trading at 89.00/89.10, compared with Tuesday's close of 89.15/25. Despite the modest climb, the currency remained near almost three-year lows and not far from levels where the central bank sold dollars last week.

"There are some dollars from the tea sector, and maybe some guys (banks) who could have been long are squaring off their positions," said Martin Runo, a senior trader at Chase Bank, explaining the rise.

Tea exports are one of Kenya's major hard currency earners, although traders say the market has generally been short of dollars because of a downturn in the vital tourism industry, which has been hit by a series of bomb and gun attacks in Kenya.

Runo said the central bank could step in again if the shilling dipped towards the 89.50 mark, which is roughly where it intervened with dollar sales on Thursday and Friday.

"The fundamentals still point towards a weakening shilling. Although we may see some correction, it will still maintain a bearish tone," said another trader at a Nairobi commercial bank.

"We could see some support coming as the central bank does not seem very happy to see it gravitating to 89.50," he said.

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