The shilling was at 85.20/40 per dollar at 0811 GMT, unchanged from Friday's close.

Year-on-year inflation fell to 5.32 percent in September from 6.09 percent previously, signalling to another rate cut in November, after a record 350 basis point cut to 13 percent in September. The exact date of the rate setting meeting has not been announced yet.

"Should the central bank lower the rate, that could affect the shilling because that is an indication to (commercial) banks to reduce their lending rates. So more liquidity in the market, more spending, more importing, more pressure on the shilling," said Peter Mutuku, a trader at Bank of Africa.

"Looking forward, ... GDP (gross domestic product) figures show that the economy is slowing down, so you will probably see the MPC (Monetary Policy Committee) trying to give some impetus to the economy," said Chris Muiga, a trader at Kenya Commercial Bank.

"(Policymakers) will probably loosen rates again. In the long run, it's shilling negative."

Kenya's economy grew 3.3 percent in the second quarter of this year from 3.5 percent in the same period last year, the slowest quarterly growth since the fourth quarter of 2009, official data showed on Friday.

The central bank's regular mop-up of excess shilling liquidity through repurchase agreements, has helped stabilise the local currency, which is down 0.3 percent in the year to-date.

This has caused the weighted interbank rate to steadily rise to 8.47 percent on Friday, up from 6.40 on Sept 10th, Mutuku said.

Muiga said the shilling would get respite from tea exports from the weekly auction on Tuesday.

Technical analysis of the shilling's 14-day and 50-day weighted moving average shows the shilling was expected to keep weakening in the short term.