At 0815 GMT, commercial banks quoted the shilling at 85.00/20 per dollar, the same level it closed at on Tuesday.

"The shilling is supported for now by tea guys selling dollar. But we are seeing some weakening bias on the local currency due to a pile up in demand, mostly from the oil sector," said Duncan Kinuthia, head of trading at Commercial Bank of Africa.

"If the central bank was not mopping up liquidity the shilling would have weakened significantly by now."

The central bank has used repurchase agreements for most of this year to stabilise the shilling, which slid sharply in 2011 as inflation soared to a peak of 20 percent and the central bank responded slowly.

On Tuesday, the bank was in the repurchase agreement market to mop up 8.5 billion shillings ($100 million), but only took out 3.1 billion shillings in 7-, 14- and 21-day repos.