NAIROBI, April 20 (Reuters) - The Kenyan shilling held firm against the dollar on Friday and was expected to remain supported in familiar ranges thanks to tight liquidity and inflows ahead of a Treasury bond auction next week. At 0656 GMT, commercial banks quoted the shilling at 83.10/30 per dollar, a level it has been trapped in over the last three sessions, and within the recent range of 83.00-83.50. "The shilling might hold at this levels today as banks square-off their positions. Liquidity is also tight in the market," said Julius Kiriinya, a trader at African Banking Corporation. Traders said the local currency would remain supported by tight liquidity in the money market and offshore dollar inflows into a two-year Treasury bond worth 5 billion shillings ($60.1 million) being auctioned on April 25. The central bank is also scheduled to sell 91- and 182-day Treasury bills worth a total 4 billion shillings next week. Yields on government paper continued to edged down in oversubscribed sales, as investors track down inflation that fell to 15.6 percent in March and the central bank held its benchmark rate steady at 18 percent for a fourth straight month in April. The shilling has gained 2.5 percent against the dollar this year, and is off a record low of 107 per dollar hit in October, partly aided by offshore interest in debt and the central bank's hawkish stance adopted late last year. "The shilling looks quite stable at this level and inflows from the debt side will help it hold. But this could be the calm before the storm," said a trader at a leading commercial bank.

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