The Kenyan shilling strengthened in early trade on Friday, after the central bank sold dollars late on Thursday and helped by muted corporate demand for the U.S. currency.
The shilling was quoted at 105.20/40 to the dollar, compared with Thursday's close of 105.55/106.65.
A sale of dollars by the central bank yesterday late evening is meeting some of the demand said, one senior trader who asked not to be named, adding corporate demand for dollars remained subdued.
A second trader, who confirmed the central bank dollar sales late on Thursday, said some companies were holding shillings to meet a tax payment deadline on Monday.
A shortage of shillings was also supporting the currency. Traders said overnight lending rates had climbed to about 25%, up from about 12.9% earlier this month.
The shilling has lost about 14 percent of its value against the dollar so far this year, almost touching a record low of 106.80 set in October 2011 last week.
Global dollar strength, an expanding trade deficit and poor tourism inflows have hurt it, but sporadic central bank dollar
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