Rupee hits record low of 176.05 on political crisis

REUTERS: The rupee fell to a record low on yesterday as political uncertainty triggered by President Maithripala Sirisena’s decision to sack Parliament weighed on sentiment, market participants said. 

The currency hit 176.05 versus the dollar, surpassing its previous all-time low of 175.90 hit on Monday. 

Sirisena dissolved Parliament on Friday night and called a general election for 5 January, drawing international criticism in a move likely to deepen the country’s political crisis. 

His rivals have challenged the decision, with the market awaiting a Supreme Court ruling yesterday. “Exporters are not converting dollars and there is a lack of liquidity in the market,” one trader told Reuters, asking not to be identified. 

The rupee closed at 175.60/75 per dollar on Monday and has fallen 14.6% so far this year, Refinitiv Eikon data showed.