On the stock market, Kenyan shares edged back above the 3,800 point support level.

At the 1300 GMT market close, commercial banks quoted the shilling at 83.75/85 per dollar, unchanged from the close on Monday when it strengthened by 0.3 percent on the day.

"We expect it to strengthen further on agricultural exporters selling (dollars), mostly the tea guys," said John Muli, a trader at African Banking Corporation. "83.50 is the target now."

During Tuesday's session, the bank mopped up 3.5 billion shillings via repurchase agreements, after it received bids worth 4.9 billion shillings.

The east African nation is the world's biggest exporter of black tea and the crop is one of its largest foreign exchange earners, raking in $1.27 billion last year.

The shilling has gained 1.5 percent this year due to the central bank's tight monetary policy stance and traders said the bank was likely to keep draining shilling liquidity.

The bank has stepped up its open-market operations this year to absorb persistently high levels of shillings due to debt redemptions, adding longer-tenure repurchase agreements of up to 28 days to its range of policy options in June.

In stocks, the benchmark NSE-20 Share Index inched up 0.2 percent to cross back over the 3,800 support level after dipping below yesterday.

The index closed at 3,800.23 points as investors trickled back into shares as yields dipped in the debt market.

"The fall we saw was a momentary blip on profit taking on banks' stocks and Safaricom," said Samora Kariuki, an analyst at NIC Securities.

"There is a lot of support on (the) macro economic perspective with interest rates and inflation coming down. The 3,800 mark remains a key support level."

Standard Chartered Bank recovered its previous session's loses, jumping 4.7 percent to 196 shillings a share, while Safaricom, the country's leading telecom provider and the most capitalised firm on the bourse, rose 1.3 percent to 3.80 shillings.