History of Sri Lanka Currency
The earliest used currency of Sri Lanka was known as Kahapana and it was called eldings in English, Puranas in Sanskrit. Kahapana was a coin with symbols one side of it or both side of the coin. According to the historical evidence they had been in use since the 3rd Century BC. The coins were made of metal and they were in varying shapes such as rounded, rectangle, square or oval. Most of the coins discovered were made of silver. Currency unit that was known as Kahavanu was in circulation in the island from around 7 to 8 century AD.
The currency of Sri Lanka during the colonial rule
At the British government of Sri Lanka first retained the denomination of the Dutch monetary system, namely the rix-dollar divided into 12 fanams or 48 stuivers of 192 challies. The madras administration, however, kept its accounts, as in Madras, in star-pagodas, Madras fanams and ‘cash’, the start-pagoda being reckoned at 45 Ceylon Dutch Fanams, or 180 stuivers or three and a half rix-dollars.
The Dutch stuivers or ‘doodies’ current in the island were accepted by the British as currency and rated as 48 the rix-dollar, side by side with the English copper coins. Currency notes of 100, 50 and 25 rix-Dollars were issued in 1800. In 1802 the first coinage was made of 4,2, and 1 stuiver; in 1802, 1803 and 1804, coins of 1,1/2 and ¼ stuiver were also issued; in 1803 coins of 1 and ½ rix-dollar were struck.
In 1812 the rix-dollar was rated at is. 9d. or 11 3/7 to the pound sterling and a mint was established in the island. In 1815 copper coins of 2, 1 and ½ stuiver were coined. 37,339 rix-dollars worth of Dutch Challies were taken as a prize in Kandy and were put into circulation; in 1815 the Ceylon fanam was made equal to the Indian anna.
In 1823 the Madras rupee and quarter rupee were made current in Ceylon. But in 1825 the sterling currency of pounds, shilling and pence and halfpence and farthings were introduced and the silver rix-dollar was rated at one shilling and six-pence and was called in Sinhalese Patagaya or Ridi paha and in Tamil iraiyal; the copper fanam was rated at a penny half-penny, the Challies at a halfpenny. All notes expressed in rix-dollars were withdrawn, and all Ceylon copper coinage was demonetized from January 1831.
The currency of Sri Lanka during the British rule had been considerably changed after the independence of the island. The notes issued by the colonial rulers were used up to 1951 while the coins were used until 1963. The series of the new coin was introduced in 1963 and they were carrying the emblem of Ceylon. Today Sri Lanka rupee is the official currency of Sri Lanka and it is divided into hundred cents.