Sri Lanka operates on the Sri Lankan Rupee, which trades under the currency code LKR. The Central Bank of Sri Lanka issues banknotes in denominations of 20, 50, 100, 500, 1000, and 5000 rupees. Coins circulate in values of 1, 2, 5, and 10 rupees, though the smallest denominations have diminished purchasing power. The rupee has experienced significant depreciation against major currencies in recent years. In 2022, the currency lost approximately half its value against the US dollar during an acute foreign exchange crisis that resulted in severe import restrictions and fuel shortages. The crisis led to the first sovereign debt default in Sri Lanka's history in April 2022. Exchange rates fluctuate substantially, and official rates have at times diverged from informal market rates during periods of foreign currency scarcity. The Central Bank maintains exchange controls, though these have been periodically relaxed and tightened based on reserve levels.
Currency exchange services operate through banks, authorized money changers, and hotels. Banks in Colombo, including branches of Commercial Bank of Ceylon, Hatton National Bank, and Sampath Bank, offer exchange services during standard business hours, typically from 9:00 AM to 3:00 PM on weekdays. State-owned Bank of Ceylon maintains the most extensive branch network across the island. Money changers at Bandaranaike International Airport operate 24 hours but historically offer less favorable rates than city branches. Licensed money changers in tourist areas including Galle Fort, Kandy, and Negombo display their rates publicly. Hotels provide exchange services but typically at rates 3-5% below bank rates. Exchanging currency through unauthorized dealers carries legal risk and has resulted in arrests of both dealers and customers during enforcement campaigns. Keeping exchange receipts is advisable as some banks require them for reconverting rupees to foreign currency on departure.
ATMs disperse throughout urban areas and major tourist destinations. Commercial Bank, Sampath Bank, and Nations Trust Bank operate the largest ATM networks. Most machines accept Visa and Mastercard, with fewer accepting American Express or Diners Club. Daily withdrawal limits range from 100,000 to 250,000 rupees depending on the bank and machine, though foreign cards sometimes face lower limits. Transaction fees vary. Foreign cards typically incur both a local bank fee of 200-500 rupees per withdrawal and a foreign transaction fee charged by the home bank, often 2-3% of the withdrawal amount. ATMs in Colombo, Kandy, Galle, and Negombo generally maintain cash availability, but machines in smaller towns periodically run empty, particularly on weekends and holidays. During the 2022 economic crisis, ATM cash shortages became widespread even in major cities, with banks implementing strict daily withdrawal limits for account holders. Network connectivity issues occasionally prevent transactions from completing, though the money may still be debited. Using ATMs inside bank branches during business hours provides immediate recourse if problems arise.
Credit cards see acceptance primarily in higher-end establishments. Hotels rated three stars and above in Colombo, Kandy, Galle, and major beach resort areas accept Visa and Mastercard. Restaurants catering to tourists generally accept cards for bills exceeding 2000-3000 rupees. Some establishments add a surcharge of 2-4% for card payments, though this practice violates card network rules. The government imposed a requirement in 2019 that businesses with annual turnover exceeding certain thresholds must accept electronic payments, but enforcement remains inconsistent. Most guesthouses, local restaurants, street food vendors, tuk-tuk drivers, and small shops operate cash-only. Even establishments displaying card logos sometimes report that machines are not working or lack connectivity. The telecommunications disruption that accompanied the 2022 crisis further reduced card acceptance as point-of-sale terminals depend on mobile networks or internet connections. Carrying cash remains essential outside major tourist infrastructure.
Mobile payment systems have expanded rapidly but serve primarily domestic users. Dialog Mobile, the largest telecommunications provider, operates a mobile wallet service called eZ Cash launched in 2012. Mobitel offers mCash, and Sri Lanka Telecom provides a similar platform. As of 2023, approximately 7 million people had registered mobile wallets, though active usage rates remain lower. These services allow peer-to-peer transfers, bill payments, and merchant payments through QR codes. Integration with foreign credit cards or bank accounts from outside Sri Lanka poses technical challenges. Most mobile payment platforms require a Sri Lankan mobile number and local bank account for setup, limiting utility for short-term visitors. Some tourist-facing businesses in Colombo and beach areas display QR codes for mobile payments, but confirming compatibility before ordering prevents awkward situations. The Central Bank has promoted mobile payments as part of a broader financial inclusion strategy, particularly following the pandemic.
Tipping practices vary by establishment type and region. Restaurants add a 10% service charge to bills as standard practice, appearing as a separate line item. This charge goes to the establishment rather than directly to service staff, so leaving an additional 5-10% in cash for good service remains customary at tourist-oriented restaurants. Hotels include service charges in room rates, but guests typically tip porters 100-200 rupees per bag and housekeeping staff 200-500 rupees per day. Tuk-tuk drivers do not expect tips beyond negotiated or metered fares, though rounding up to the nearest convenient denomination is common. Tour guides typically receive 500-1000 rupees per person per day for group tours, with higher amounts for private guides. Spa and massage therapists generally receive 10% of the service cost. Tipping remains less ingrained in Sri Lankan culture than in some tourism-dependent economies, and excessive tipping can create awkward dynamics or inflate expectations for subsequent visitors.
Bargaining applies in specific contexts. Fixed-price retail stores and supermarkets do not negotiate, and attempting to bargain causes confusion or offense. Markets selling fruits, vegetables, textiles, and handicrafts expect negotiation. Prices quoted to tourists typically start 30-50% above what locals pay, particularly at craft markets near Galle Fort, Kandy town, or Colombo's Pettah Market. Tuk-tuk rides without meters involve negotiation before departure, with fares for short trips in provincial cities starting around 100-150 rupees. In Colombo, app-based services like PickMe have reduced bargaining necessity by providing upfront pricing. Guesthouse rates sometimes flex during low season or for multi-night stays, particularly when booking directly rather than through platforms. Gem dealers, tailors, and tour operators all negotiate, though aggressive haggling that disrespects the seller creates poor dynamics. Asking "What's your best price?" establishes willingness to negotiate without confrontation.
Mobile connectivity in Sri Lanka operates through four major providers. Dialog Axiata controls approximately 45% market share and provides the most extensive coverage including rural areas and national parks. Mobitel, owned by Sri Lanka Telecom, covers urban areas and major highways comprehensively. Hutch and Airtel serve primarily urban and suburban zones with more limited rural reach. All four carriers offer prepaid SIM cards available at the airport, official stores, and countless small shops displaying carrier logos. Prepaid packages include data allowances, voice minutes, and SMS in various combinations. As of 2024, a typical tourist package with 20-30 GB data valid for 30 days costs 1500-2500 rupees depending on carrier and promotional offers.
Purchasing a SIM requires presenting a passport and completing registration forms, a requirement implemented in 2017 under the Telecommunications Regulatory Commission of Sri Lanka. Airport counters at Bandaranaike International sell SIM cards 24 hours, though queues can extend 30-45 minutes during peak arrival times. Activation occurs immediately after registration. Recharging credit uses scratch cards purchased at small shops, electronic top-ups through apps, or bank transfers. The recharge process involves dialing carrier-specific codes and entering card numbers, with instructions printed on cards in English and Sinhala. Mobile networks went offline for several days during March 2022 protests as authorities imposed emergency restrictions, and briefer outages occurred during subsequent civil unrest periods.