NAIROBI (Reuters) - The Kenyan shilling was steady against the dollar but could come under pressure if figures due Friday show inflation is still falling, which could drag down investor returns from government bonds. Typically, lower inflation cause yields on government securities to be cut and interest rates to be lowered, which make it cheaper for importers to access credit and commercial banks to hold long dollar position, weighing on the shilling. "We are watching out to see where inflation will come in," said Dickson Magecha, a trader at Standard Chartered Bank. At 0832 GMT, commercial banks quoted the shilling at 85.20/40 versus the dollar, barely changed from Thursday's close of 85.25/45. Inflation in the east African nation soared last year to peak at nearly 20 percent in November, due to a widening fuel import bill and drought, which dragged the shilling through a series of record lows. A tight monetary policy adopted by policymakers in the fourth quarter of 2011 helped bring down inflation for nine straight months and stabilised the foreign exchange rate. Policymakers embarked on an easing cycle in July, slashing the benchmark central bank rate by a total 500 basis points in two meetings to 13 percent, in order to support economic growth. A Reuters poll of 11 analysts showed that year-on-year inflation could fall to 5.40 percent in September from 6.09 percent in August. Traders said the shilling could come under pressure from last minute end-month importers demand for the dollar and banks piling on greenbacks in anticipation that lower inflation in September could give room for a further cut in rates by the central bank. "We expect to see a bit of weakening due to energy flows. We could touch 85.50 by the close of the day," Magecha said.

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