At 0816 GMT, commercial bank s quoted the shilling at 84.55/65 per dollar, 0.5 percent weaker than Wednesday's close of 84.10/30.

"The dollar is slightly higher due to an up tick of demand from the oil guys," said Dickson Magecha, a trader at Standard Chartered Bank.

Traders said they expected the shilling to trade in the 84.00-84.70 range supported by the central bank mopping up liquidity using repurchase agreements (repos).

The regulator has been actively absorbing shilling liquidity via repos this year to prevent the currency from last year's volatility that saw it hit an all-time low of 107 per dollar in October.

The shilling is up 0.7 percent in the year to date, helped by a tight monetary stance adopted by policymakers for most of this year. But last week's 350 basis points rate cut to 13 percent is seen posing a downside risk to the local currency.

"Any move that's geared towards reducing liquidity in the market would be shilling positive," Magecha said.