By Kevin Mwanza

NAIROBI, Nov 22 (Reuters) - The Kenyan shilling held steady

against the dollar on Thursday but traders said it may weaken in

the coming days on growing greenback demand from importers.

Kenyan shares were dragged lower by banking stocks.

At the 1300 GMT markets close, commercial banks quoted the

shilling at 85.65/85 to the dollar, barely changed from

Wednesday's close of 85.60/80.

'The bias is for the shilling to weaken after the central

bank cut its interest rate. If banks lower their base lending

rates too, it may feed into the import bill as importers access

credit,' said a trader at one commercial bank.

Policymakers embarked on an easing cycle in July, slashing

the benchmark central bank rate by 700 basis points to 11

percent to support economic growth.

The central bank has also regularly soaked up excess

liquidity from the market this year by using repurchase

agreements to stabilise the currency, which is down 0.6 percent

year-to-date.

'We are waiting to see how much the central bank will seek

to tighten liquidity. That might give the shilling some relief,'

added Ignatius Chicha, head of Markets at CitiBank.

At the 91-day Treasury bills sale on Thursday,

the bank received bids worth 11.2 billion shillings ($130.5

million) for the 4 billion shillings worth of debt on offer, and

accepted bids worth 4.8 billion shillings.

In stocks, the main NSE-20 share index slipped 0.2

percent to 4,162.73 points led down by Equity Bank and

National Bank of Kenya.

Equity Bank, the country's biggest bank by depositors and

one of the most traded stocks, fell 3.1 percent to 23.50

shillings a share.

'Equity's dividend yield is below the banking sector average

dividend yield of 4.5 percent, which means its current share

prices is a bit overstretch,' said Rufus Mwanyasia, an analyst

at Tsavo Securities.

National Bank, whose nine-month pretax profit tumbled 68

percent on Tuesday, dropped 2.7 percent to 17.75 as investors

existed the stock.

In the debt market, government and corporate bonds worth 710

million shillings were traded, down from 762 million shillings

on Wednesday.

...........................Shilling spot rates

.....................Shilling forward rates

.......................Cross rates

..................................Local contributors

.......................Central Bank of Kenya Index

.....................Kenyan Bonds contributor pages

...............Treasury bill yields

..................Central bank open market operations

.........................Horizontal repo transactions

,................Daily interbank lending rate

.............................Kenya Bond pricing

..................Real time Africa economic data

...........................African economic news

.................................NSE-20 Share Index

.................................NSE All Share Index

...........................FT NSE Kenya 15 Index

.......................... FT NSE Kenya 25 Index

SPEED GUIDES:

($1 = 85.8000 Kenyan shillings)

(Editing by Yara Bayoumy)

Keywords: KENYA MARKETS/

(kevin.mwanza@thomsonreuters.com)(Tel: +254 20 2224717)(Reuters Messaging: kevin.mwanza.thomsonreuters.com@reuters.net)

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