By Kevin Mwanza NAIROBI (Reuters) - Kenya's shilling slipped on Monday as importers bought dollars expecting the central bank to cut rates again this month. Mumias Sugar shares dragged the stock index lower. At the 1300 GMT close of the market, the shilling was quoted at 85.45/65 per dollar, slightly weaker than Friday's close of 85.35/55. "People think the rate will be cut. That might put some pressure on the shilling," said Ignatius Chicha, head of markets at CitiBank Kenya. "Sentiment is the key thing now, but after Wednesday we may see some normalisation." A Reuters poll of 12 analysts and market participants gave a median forecast for a 200 basis points cut in the central bank rate to 11 percent on November 7, to boost lending and the economy. Traders said a fall in inflation in October to a two-year low of 4.14 percent had created room for another potentially bold rate cut, following a 350 basis points cut in September, for a total of 500 basis points since July when the easing started. The shilling exchange rate has been stable this year, helped by the central bank's tight monetary stance, after a surge in inflation last year weakened it to record lows. During the session, the central bank, which has regularly mopped up liquidity from the market, accepted all the 10.18 billion shillings it received in bids for the 7 billion shillings it had offered in repurchase agreements. In the stock market, the main NSE-20 Share Index shed 0.03 percent to close at 4,124.53 points, led down by shares in sugarcane grower and miller Mumias, after they started trading without dividend. The shares tumbled 9.1 percent to a 25-week low of 5.50 shillings and analysts said growing competition from smaller millers could keep Mumias on the defensive. "It is fundamentally weak since losing some market share to competitors," said Faith Atiti, an analyst at NIC Securities. Atiti said a further official rate could prompt companies to revive shelved projects and investors to seek cheaper credit, supporting the stock market. In the debt market, government and corporate bonds worth 1.9 billion shillings were traded, down from 3.5 billion shillings traded on Friday.

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