NAIROBI, Feb 9 (Reuters) - Demand for dollars from Kenyan oil importers helped push the shilling down 0.3 percent on Thursday, offsetting some of Wednesday's gains although the currency remains broadly supported by high interest rates. The shilling, which took a hammering in a broader emerging markets sell off in the second half of last year, hit an 11-month high on Wednesday after the central bank absorbed 10 million shillings from the money market to defend the local currency and in a bid to shore up interest rates. "It (the dollar rate) went higher on oil (dollar) demand," Dickson Magecha a trader at Standard Chartered Bank said. "However, the shilling should remain supported by high interest rates and so long as we see muted (dollar) demand." A Commercial Bank of Africa report said the shilling had room to strengthen further, barring a significant uptick in demand for the U.S. currency. Duncan Kinuthia, head of trading at Commercial Bank of Africa said there were dollar inflows from the agriculture sector that were lending support to the shilling, but not enough to offset the tepid importer demand for dollars. "People are just taking advantage of these low levels. I see us back and forth since we have mild (dollar) demand but not consistent buyers," Kinuthia said.

Source