Background of the Sri Lanka Rupee
The island formerly known as Ceylon was first settled by Europeans when Portuguese explorers landed on the island in the 16th century. Dutch settlers arrived in the following century, and the British made Ceylon a crown colony in 1802. Ceylon became independent member of the British Commonwealth in 1948, and the name Sri Lanka was adopted in 1972. Sri Lanka’s largest exports are garments, tea and cocoanut products.
The exchange rate of the Sri Lankan rupee was managed under a “crawling peg” regime for many years. As the country’s foreign exchange reserved rapidly became depleted at the turn of the century, the National Bank of Sri Lanka decided to make the rupee a free-floating currency in January of 2001 to minimize further erosion.
Violence has marred the country’s existence through the 1980s and 1990s as the two main political factions fight for control of the island. The civil war has been suspended indefinitely under the terms of cease-fire agreement between the Government of Sri Lanka and the Liberation Tigers of Emil Eelam, and as a result, Sri Lanka’s tourism industry has rebounded since early 2002. The island suffered major damage from an Indian Ocean earthquake and resulting tsunami in December of 2004. The economic impact of tsunami damage was estimated at more than US$1.5 billion.
The Sri Lankan rupee is divided into 100 cents. Denominations for coins are 5c, 10c, 25c, 50c, Rs 1,Rs 2, Rs 5 and Rs 10. Denominations for banknotes are Rs 10, Rs 20, Rs 50, Rs 100, Rs 200, Rs 500, and Rs 1,000.