Sri Lanka to issue a 2000 rupee banknote again

Business Economy

A new 2000 Sri Lanka rupee banknote will be introduced in 2021 with improved security features, as part of the existing series, Central Bank Governor W D Lakshman said.

“A new currency note for Rs. 2,000 will be introduced in 2021, as part of the existing 11th note series with improved security features,” Governor Lakshman said delivering a policy roadmap for 2021.

Sri Lanka first introduced a 2000 rupee note in when current finance minister and Prime Minister Mahinda Rajapaksa was finance minister.

There were complaints among some members of the public that the note was too unwieldy and it stuck out of purses.

The note is legal tender but has gradually gone out circulation as damaged notes are withdrawn by the central bank.

To mark the 70th anniversary of the central bank, a 20 rupee an uncirculated 20 rupee commemorative coin was issued. A coin for standard circulation would be issued shortly, he said.

When the central bank was set up with money printing powers in 1950, a US dollar was worth around 4.70 rupees and the note issue was fully backed by foreign reserves it had inherited from the previous currency board.

The currency board set up in 1885 could not print money and the country had no balance of payments crises or high inflation.

Under the currency board, Sri Lanka had high living standards compared to Asia (some say second only to Japan).

In 1951 the Sri Lanka had 216.4 million dollars of forex reserves. In 1952 the central bank was hit by a 79 million dollar balance of payments deficit and foreign reserves fell to 163 million dollars. By 1953 reserves were down to 114 million dollars and a exchange control law was enacted.

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