It will probably come from one of the legendary founders of the city - Kyi https://en.wikipedia.org/wiki/Kyi,_Schek_and_Khoryv The Icelandic name will translate to Kyi's enclosure (garðu as in Ásgarðr, the early form of Asgard). There has been a vowel shift somewhere along the line, æ being a shorter vowel than the double i in Кий, but it looks likely to me.
It was the Vikings who called Kiev by this name. You can read about it in the "Flateyjarbok". I'm not sure about the mening of the word. "Garður" is city, for sure. But I'm not sure about "Kænu". It might refer to a boat type called "Kæna"?
I think it's a small sailing boat, called "Kahn" in German.
Kænugarðar was the capital of the old Garðar empire colonized by the Vikings in Russia/Ukraine. (In Norwegian called Gardarike).
KÆNA, u, f. [Germ. kahn], a kind of boat, Edda (Gl.): a nickname, Fms., freq. in mod. usage. Kænu-garðar, m. pl. a part of ancient Garðar (q. v.), Fb. iii.
From looney's link "Kíev, eða Kænugarður" - eða meaning or. I agree that your boat looks better linguistically, but what would the the genitive of the Viking form of Kyi be? (I have a limited ability in reading Icelandic, and rely on position and context. Going the other way is harder...)
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