Colombo (TIP): The Central Bank of Sri Lanka (CBSL) issued an official clarification on August 2 refuting rumours that the Indian rupee could be used as legal tender in the island nation.
“The CBSL wishes to clarify certain misrepresentations of facts currently circulating in the public domain on the Indian Rupee (INR). While we have officially authorised the INR as a designated foreign currency, it doesn’t make the INR legal tender in Sri Lanka for domestic payments/settlements,” said a notice issued by the CBSL on Wednesday.
The bank further stated that the Sri Lankan public should not be misled by the misrepresentation of facts circulating in the public domain on the INR.
The CBSL also said that from time to time, they designate foreign currencies to facilitate trade.
“Under the provisions of the Banking Act and the Foreign Exchange Act, there are 16 designated foreign currencies in used in Sri Lanka. The INR became a part of the list in August 2022,” said the CBSL.
The bank reiterated that the legal tender in Sri Lanka for domestic payments and settlements will remain the Sri Lankan Rupee (LKR).
Trade between India and Sri Lanka has grown rapidly after the Indo-Sri Lanka Free Trade Agreement came into effect in March 2000.
India has traditionally been among Sri Lanka’s largest trade partners. In 2020, India was Sri Lanka’s 2nd largest trading partner with the bilateral merchandise trade amounting to about $ 3.6 billion. (ENS)