At 0823 GMT, commercial banks quoted the local currency at 82.80/83.00 per dollar, weaker than Wednesday's close of 82.70/90.

"There is some demand from corporate and energy guys," said Sameer Lagadia, head of trading at Diamond Trust Bank.

The currency showed little reaction after a majority of Kenyan lawmakers voted late on Wednesday to absolve central bank chief Njuguna Ndung'u of any responsibility for the shilling's tumble to a record low of 107 per dollar on Oct. 11.

"The market did not expect the report to go far," said Ignatius Chicha, head of markets at Citibank.

A report by a parliamentary committee had wanted Ndung'u to step down, accusing him of failing to react in a timely fashion to address the shilling's decline, panicking the market and leading to speculation and the hoarding of foreign exchange.

However, MPs criticised the governor for keeping the cost of borrowing at the central bank's discount window - usually a last resort - below the interbank and T-bill rates, encouraging commercial banks to borrow from the window as the shilling fell.

Traders said tight monetary policy was likely to underpin the shilling following the central bank's decision on Tuesday to hold its key interest rate steady at 18 percent for the third month in a row, aided by demand from offshore investors for Kenya's high yielding government securities.

"It (shilling) still has room to strengthen after the central bank left its rate unchanged and inflows from government papers," said Lagadia.

The weighted average yield on Kenya's 364-day Treasury bills fell to 17.035 percent on Wednesday, from 20.956 percent previously, weighed down by heavy demand for the paper, while 182-day Treasury bills fell to 18.377 percent from 18.757 percent in a heavily undersubscribed auction.

Central bank is set to sell 91-day Treasury Bill on Thursday, worth 4 billion shillings ($48.34 million).

Duncan Kinuthia, head of trading at Commercial Bank of Africa said there was some shilling tightness in the market, which would help prop up the local currency.

The average interbank rate rose to 24 percent on Wednesday with 7.66 billion shillings borrowed among the commercial banks, up from 23.6 percent a day earlier.