Nairobi, April 21 -- Global bank Citi expects renewed pressure on the Kenyan shilling as higher fuel prices create a wider current account deficit in the wake of the Iran war.

The global lender sees the new Middle East crisis as a test for the Central Bank of Kenya (CBK) which is tasked with minimizing extreme volatility on the exchange rate system as part of its policy.

Citi has suggested that the apex bank could allow the shilling to weaken as a shock absorber to the Iran crisis, a move which could cushion Kenyan exports by making local goods cheaper in international markets at a time when demand could be weakened as global growth slumps.

The Kenya shilling has remained stable despite heightened geopolitical risks with the CBK attrib...