NAIROBI (Reuters) - The Kenyan shilling was steady on Tuesday but should be strengthened later in the session by inflows of dollars from the country's weekly tea auction.
Tea is Kenya's leading foreign currency earner and is sold at the port city of Mombasa every Tuesday.
At 0711 GMT, commercial banks quoted the shilling at 85.75/95 per dollar, barely changed from Monday's close of 85.80/90.
"It's a bit quiet at the moment but tea sales might support later today," said Julius Kiriinya, a trader at African Banking Corporation.
The shilling weakened steadily through January and February before jumping in the run up to presidential elections in early March which avoided the sort of widespread violence seen after the last polls in 2007.
Overall it is 0.4 percent stronger against the dollar so far this year, but weakened at the end of last week as the defeated candidate, Prime Minister Raila Odinga, challenged the vote in the Supreme Court.
Banks said the case had caused some anxiety, because it could usher in fresh polls if the petition is upheld, prolonging uncertainty in the country of 40 million people.
A swift, transparent resolution of the legal row will underscore the reputation of east Africa's largest economy as a stable democracy following a broadly peaceful vote on March 4.
"The market remains cautious with an eye on the corridors of justice on the Presidential petition," said Commercial Bank of Africa in a daily note.