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 Jan. 5, drawing international criticism, in a move likely to deepen the country's political crisis.

His rivals have challenged the decision, with the market  awaiting for a Supreme Court ruling on Tuesday.

"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 percent so far this year, Refinitiv Eikon data showed.