The twin explosions hit Nairobi two days after the US embassy in Kenya warned an attack was imminent as the east African nation fights al Qaeda-linked al Shabaab militants in neighbouring Somalia.

Traders said investors were also watching out for central bank action in the market, after it sold dollars to commercial banks and mopped up shilling liquidity through repurchase agreements last week.

The central bank is scheduled to hold a Monetary Policy Committee meeting on Nov. 1, four weeks after it shocked the market with a 400 basis point rise in its key interest rate.

At 0806 GMT, commercial banks quoted the shilling at 100.50/70 against the dollar, barely changed from Monday's close of 100.50/90.

"If we have a continued security threat it will affect the foreign exchange market negatively," said a senior trader at one commercial bank.

"The shilling looks weak at the moment. But it depends on what the central bank does. They have been intervening and we expect that they will be back in the market."

Other traders said the market was illiquid and they expected the shilling to trade in a range of 99.00-102.00 in anticipation of the central bank's next move.