* Shilling tracking euro weakness * Interbank rate falls below c.bank rate for 1st time since June (Adds discount window rate, shilling) NAIROBI, Sept 12 (Reuters) - The Kenyan shilling weakened against the dollar on Monday, mainly due to risk aversion emanating from the euro-zone woes, traders said. "Right now it's a global move. There is a huge risk aversion out there and these are the moves that are working the shilling," said Dickson Magecha, a trader at Standard Chartered Bank. Typically, the local currency weakens against the dollar as investors move out of emerging market assets they deem riskier due to the euro crisis. The euro hit 6-1/2 month lows against the U.S. dollar on Friday due to nervousness over the outcome of a Greek debt swap deal. Traders said the market was also watching out for any local action that could affect the shilling after the government said last week it had asked the International Monetary Fund to front-load an existing credit facility. At 0638 GMT, commercial banks quoted the shilling at 94.20/40 against the dollar, weaker than Friday's close at 94.00/20. The weighted average interbank lending rate fell to below the Central Bank Rate of 6.25 percent for the first time since June 22. The interbank rate was at 5.6601 percent from 7.1844 percent previously, central bank data showed. "That was expected, because of the calculation and because most banks are right now trying to keep a bit of liquidity in the short end to try and counter any sudden moves that could come up...if there is a huge up in rates," said Magecha. The discount rate edged down to 9.34 percent from 10.13 percent, central bank data showed. Banks will charge the new rate on Monday. Lending rates have been falling since Aug. 29, after the central bank started using a moving average of interbank rates over an unspecified period to compute its discount window rate.

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