What Is SLR - Sri Lankan Rupee (LKR)?
SLR is the commonly used currency abbreviation for the Sri Lankan rupee, although the international ISO 4217 abbreviation for the SLR is in fact LKR. It is the official currency of the Democratic Socialist Republic of Sri Lanka, which was known as Ceylon prior to 1972.
BREAKING DOWN SLR
The Sri Lankan rupee replaced the Indian rupee as the official currency in 1972. It is divisible into 100 cents. As of 2018, Sri Lankan currency in circulation includes Cts. 1, 2, 5, 10, 25 and 50, and Rs 1, 2, 5 and 10. Bank notes are available in denominations of Rs 10, 20, 50, 100, 200, 500, 1,000, 2,000, and 5,000.
The Sri Lankan rupee frequently appears as the currency code Rs or SLRs to avoid confusion with the Indian rupee.
History of the Sri Lankan Rupee
The British pound (GBP) became the official currency in 1825. Prior to this period, the currency in use was the Ceylonese rixdollar, a currency used in parts of Europe and some Dutch colonies.
In 1836, the British declared the Indian rupee (INR) the official coin of the island nation, as it returned to the Indian currency area. In 1869, Ceylon (as Sri Lanka was referred to at that point), established the rupee as an unlimited legal tender. The INR became the only legal tender for the island three years later. The country officially gained independence from the British in 1948 and established the Central Bank of Ceylon two years later.
Once the country was renamed to Sri Lanka, it officially adopted its own currency in 1972.
Sri Lankan Economy
Since gaining independence in 1948, the Sri Lankan economy has faced constant challenges by infighting by various ethnic groups vying for government control, Marxist insurrections and a prolonged civil war.
Since 2009, the Sri Lankan economy has emerged as one of the fastest growing in the world, with an annual growth rate of 6.4 percent between 2003 and 2012 and inflation averaging 0.80 percent annually. Sri Lanka ranks second among countries in the South Asia region with a gross domestic product (GDP) of $80.59 billion ($233.64 billion in purchasing power parity) with per capita income doubling between 2005 and 2015 to approximately $11 million. Sri Lanka is the world’s second largest producer of tea. Major exports include cinnamon, rubber, sugar and exotic woods such as teak, mahogany and ironwood. Service and technology industries also contribute to the economy.
Role of the Central Bank
Sri Lankan officials placed a high priority on establishing a stable economic environment to maintain social and political order. The Monetary Law Act gives the central bank broad authority to implement monetary policy to obtain its objectives of economic and price stability. The Central Bank formulates and administers its monetary policy, and acts to influence the cost and availability of money. At present, the monetary policy framework of the country places greater reliance on market-based policy instruments and the use of market forces to achieve the desired objectives. It maintains a diligent watch over the supply of money and a vigorous campaign of shredding notes and replacing them as needed.
The Monetary Control Act also entrusts the central bank with designing, printing, and distributing Sri Lanka's banknotes and minting of coins. One of the unique and instantly recognizable features of Sri Lankan notes is the vertical printing on the reverse side. Other distinguishing features include cotton stock and raised textures for the visually impaired. Bank notes also feature watermarks, security threads, see-through images, ink shifting and other security measures to combat counterfeiting.