NAIROBI (Reuters) - The Kenyan shilling held steady on Tuesday and was seen supported by a successful one-year Treasury bond auction later in the day as dollar-selling foreign investors rush to lock in high returns. Heavy demand is expected to put downward pressure on yields at Tuesday's sale, intended to raise 10 billion shillings. On Wednesday, the central bank will sell 91- and 182-day Treasury bills for 7 billion shillings. "We expect the shilling to remain supported by the high interest yields in the market as offshore investors continue to cash in," said Bank of Africa in a daily report. High yields on government debt in the east African region's biggest economy have helped to prop up the shilling, which is up 2.7 percent against the dollar in the year to date. At 0737 GMT, commercial banks quoted the shilling at 82.50/70 against the dollar, unchanged from Monday's close. Traders said they expected the shilling to trade in the 82.00-84.00 range in coming days. They said the shilling could strengthen due to banks selling dollars received from exporters on Monday, but persistent dollar buying by the central bank to prop up reserves could weigh on it. The central bank, which was blamed by some for letting the shilling tumble through a series of record lows last year, has been buying hard currencies to beef up its foreign exchange reserves. "The market expects to see some greenback inflows from the bond auction today, but not as much as we've seen before because the yield have come down significantly," said Dickson Magecha, a trader at Standard Chartered Bank.

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