Kenya shilling steady but client dollar demand to weigh

NAIROBI (Reuters) - Kenya's shilling was stable against the dollar on Tuesday but is expected to weaken marginally in coming days on corporate activity as players eye political risk in east Africa's largest economy.

At 0840 GMT, leading commercial banks quoted the unit at 79.90/80.00 per dollar, barely changed against Thursday's close of 79.95/80.05. Kenyan markets were shut on Friday and Monday to mark the Christian Easter holiday.

The local currency had earlier strengthened marginally to 79.80/90.

"It's a very thin range, mostly done by the interbank," said Henry Kirimania, a senior manager at Cooperative Bank.

"I do not see much in terms of movement (on Tuesday)," he said, adding that corporate activity from Wednesday could put some pressure on the shilling.

Another bank treasury official said he was bearish on the local currency due to expected corporate clients' activity in the coming days.

Political risk could also be a factor after a war of words between coalition partners in recent days, dealers said.

Kenya was forced into a union government at the start of 2008 to end acrimony over a disputed poll. The coalition has been fraying as one side, led by Prime Minister Raila Odinga, complains that it has gotten the short end of the stick.

"We are keeping an eye on the politics and the other on market activities," said Peter Njuguna, head of trading at Commercial Bank of Africa.