History of Currency in Sri Lanka 

Sri Lanka is a country with a long history and a similarly long and rich economic history. A study of that history will doubtlessly prove fruitful not only for economists but for everyone in the society. Coins used through different time periods of a country play an important role when studying the history of that country. Although small in size, a coin has the ability of giving a wealth of information about the economic and cultural history of the country where it was used, through signs that remain on them.

Sri Lanka’s currency-use can be divided into following periods

1. Anuradhapura Era

2. Polonnaruwa to Kotte Era

3. Kandy Era

4. Colonial Era

5. Post-Independence Period since Establishment of the Central Bank of Ceylon

Anuradhapura Kingdom (377 BC– 1017AD)

The Anuradhapura Kingdom named for its capital city, was the first established kingdom in ancient Sri Lanka. Founded by King Pandukabhaya in 377 BC. Epigraphs reveal a multitude of Information about trade and currency use during the Anuradhapura era. These records suggest that the production and distribution 

of coins were done systematically. At the time, the director in charge of coin production was known as “Rupadaka” (Periyakada Vihara Epigraph). The official who authorized the produced coins was known as “Rupawaapara”. (Kaduru Wewa Epigraph)

Coins used in Anuradhapura Era

1. Swastika coins
2. Maneless Lion coins
3. Lakshmi Plaques
4. Kahavanu or Lankeshvara coins

Polonnaruwa Kingdom (1017 A.D.– 1057 A.D.)

The period covers the kingdoms of Polonnaruwa 1017-1070, 1070-1232, Dambadeniya 1232 – 1272, Yapahuwa 1272-1293, Kurunegala 1293-1340, Gampola 1341- 1374 and Kotte (Sithavaka 1521-1593) 1372- 1597. Kings of Chola dynasty that ruled from 1017 – 1070 A.D, issued a “Kahawanu” that was similar to a “Kahawanu” that was minted in the last half of the Anuradhapura era. It was made of copper. A unique characteristic of these coins was that each one bore the name of the king in power at the time of its production. This was the first coin produced in the country that bore the name of the ruler.

Coins used in Polonnaruwa to Kotte Era

1. Dambadeni Coins / Coins of the Middle Ages
2. Lion Coins

Kandyan Kingdom (1474 A.D. – 1815 A.D.)

Kandy was the last capital of the Sinhala monarchy. Kandyan Kingdom which was founded about 1474 remained an independent kingdom until the “Hill Country Agreement” dated March 2nd, 1815 was signed transferring Sri Lanka’s autonomy to the British. The Portuguese and Dutch established in the maritime areas in the 16th – 18th Centuries i.e. during Kandyan era. According to historical texts, a few different types of currency were in use during in the heyday of the Hill Country Kingdom

Coins used in Kandy Era

1. Dambadeni kasi
2. Salli
3. Indian ‘Waragama’
4. Tuttu
5. Panama
6. Tangama

Colonial Era

Even though we divided Sri Lanka’s past into eras such as Anuradhapura, Polonnaruwa and Kandy; in all those eras, the entirety of Sri Lanka was never governed by one King. In different instances, the island was invaded by foreign powers. However, until the Kotte Era, the only invaders were the Chola. Despite such instabilities, we were able to make profits through international trade (via the Silk Road), win praise and maintain our splendid international reputation. But in 1453 A.D, the situation changed as a consequence of the fall of Constantinople (Capital of the Byzantine Empire). Europeans began to seek a route to the East over the great ocean. Eventually, the Europeans were victorious in the East and the West. As a result, Sri Lanka was colonized by the Portuguese, the Dutch and the English respectively.

Portuguese Period (1505–1658)

In 1505, the Governor and Viceroy of the Portuguese State of India was Don Francisco de Almeida. His son was Lorenzo de Almeida. He was in the process of attacking and thieving Muslim ships. The common belief is that Lorenzo de Almeida and his team were caught in a storm while pursuing a group of Muslim ships and were consequently washed ashore somewhere near Galle, Sri Lanka. But it is hard to believe that the avaricious Portuguese of that time turned their attentive eye towards the prosperous trade center that was Sri Lanka only after such a coincidental

Coins used in Portuguese Period

1. Saint type coins (St. Thome)
2. Gold Tanga Malakka
3. Silver Cruzado Ginimassa
4. Silver Cakram Panam (Gold/Silver)
5. Laarins Gold Pagodi

Dutch Period (1658–1796)

In 1658 A.D, the Dutch drove out the Portuguese and took control of the coastal areas of Sri Lanka. First Batticaloa (in 1638), then Galle (in 1640), Colombo (in 1656) and finally Jaffna (1658) came under Dutch control. In 1638, after they acquired the Portuguese Fort, the Dutch made a treaty with King Rajasingha II (1635-1687). Section 14 of the treaty contains a multitude of rules regarding the use of money. According to the agreement, unless sanctioned by the King or the Dutch government, the acts of printing, producing publicizing, minting counterfeit coins or circulation was deemed illegal.

Coins used in Dutch Period

1. Rix Dollar
2. Duits Coins
3. from Zeeland Hollandaise coins
4. Coins from Utrecht
5. Coins from West freaseland Coins from Guilderland Stuivers

British Period (1796–1948)

The French revolution resulted in a major shake-up among the European powers and in 1796 the Dutch were easily supplanted by the British, who in 1815 also won the control of the kingdom of Kandy, becoming the first European power to rule the whole island. But in 1802, Sri Lanka became a Crown Colony and in 1818 a unified administration for the island was set up.Post Independence Period since Establishment of the Central Bank of Ceylon

The Central Bank of Ceylon was established on 28th August 1950 in terms of the Monetary Law Act No. 58 of 1949. The Monetary Law Act provided for establishment of a Monetary Board to administer, among other things, the issue of currency, which included both notes and coins.

Coins issued by the Central Bank of Ceylon the notes issued by the British were used in Ceylon up to 1951 and the coins were used up to 1963. The first Sri Lankan coin series was introduced in 1963. The Emblem of Ceylon was introduced in the obverse of this coin series. This series consisted of coins in the denominations of:

One cent (aluminium)

Two cents (aluminium)

Five cents (brass)

Ten cents (brass)

Twenty-five cents (copper / nickel)

Fifty cents (copper / nickel)

One rupee (copper / nickel)

Rupees 5 (nickel / brass) and Rupees 2 (copper / nickel) circulation coins were introduced in 1984 instead of the five rupee and two rupee notes.

In 2005, the Central Bank issued a new series of circulation coins of Rs.5 and Rs.2 by changing their weight and alloy, while Re. 1, Cts 50 and Cts.25 coins were issued by changing the size, alloy, weight and colour. These new coins are circulating along with the previous issued.