The shilling was posted at 85.10/30 to the dollar at the 1300 GMT market close, slightly weaker than Thursday's close of 85.00/20.

"We've seen dollar buying on the interbank market on the back of end-month tickets from energy and manufacturing players," said Dickson Magecha, a trader at Standard Chartered Bank.

"But we don't expect the shilling to go past 85.50. the central bank is actually supporting it for the long-term with its mop-ups."

The central bank has intervened regularly to soak up liquidity from the market using repurchase agreements most of this year, which has kept the shilling steady against the dollar.

The bank mopped up 9.3 billion shillings ($109.2 million) from the market on Friday, after it received 12.3 billion shillings in bids for the 10 billion it had offered in repos.

In stocks, the benchmark NSE-20 Share Index extended its rally to a seventh straight session, up 0.3 percent to 4,132.91 points, a new 20-month high and a level last seen in early March 2011.

The index has rallied 28 percent this year, making it Africa's third best performer after Nigeria and Uganda.

Kenyan shares have been boosted by investors returning from a slowing debt market and by interest rate cuts as inflation falls steadily from peaks last year.

"The momentum of the bourse seems to be sustainable going forward driven by investor optimism on third quarter results," said Moses Waireri, an analyst at Genghis Capital.

Safaricom, the country's leading telecoms and one of the most capitalised stocks, extended its gains by 2.3 percent to 4.50 shillings as investors forecast first half results would be higher due to its favourable pricing and product range.