Superintendent of the Currency Department of the Central Bank of Sri Lanka (CBSL), P.D.R. Dayananda said the CBSL is committed to maintaining ample reserves of currency notes and coins necessary for the smooth execution of public payments and settlements, ensuring an absence of any shortages.
He said that in 2022, the CBSL commissioned the production of 495 million currency notes to ensure the availability of adequate note stocks to fulfill the needs of the country’s 22 million populace. He said they opted not to place an order for additional coins since there were already ample coin reserves to meet the demand for coins (Re.1, Rs.2, Rs.5, Rs.10 and a limited amount of Rs.20 coins).
Dayananda shared with us insights into the role of the Currency Department at the CBSL and delved into topics such as the nation’s present currency reserves, forthcoming obstacles, and anticipated developments.
Excerpts of the interview
Q: Tomorrow marks the 73rd anniversary of the establishment of the CBSL. Can you reflect on the manner in which the nation’s currency requirements were addressed over the years?
A: The Currency Department of the CBSL is responsible for issuing both currency notes and coins, fulfilling the monetary requirements of the country’s populace. The founding of the Central Bank of Sri Lanka on August 28, 1950, stands as a pivotal milestone in the nation’s economic history and monetary operations. This establishment was granted the significant role of exclusively issuing both coins and currency notes.
In 1963, it introduced a coin series bearing the national emblem. This was followed by another series in 1972 featuring the “new state logo” to commemorate the transition to the Republic of Sri Lanka. In 2005, a fresh coin series emerged, characterised by reduced weight, distinct metals, and diverse colours compared to its predecessors. In 2010, a uniform Rs.10 coin design was introduced, accompanied by the release of rupee coins in 2018. Moreover, 2018 also saw the introduction of a novel coin series, encompassing denominations of Rs.2 and Rs.5.
In addition, the CBSL also issues commemorative coins, marking significant national and international events as well as honouring notable individuals in Sri Lanka. This practice has seen the issuance of commemorative coins dating back to 1957, when the CBSL released its first set of commemorative coins - a one-rupee and a five-rupee coin. Notably, the collection expanded with the addition of 2500 Buddha Jayanthi commemorative coins. These commemorative coins issued from time to time are in high demand among collectors worldwide due to their sentimental and historical value.
Since then, approximately 72 commemorative coins have been issued. These coins vary in terms of the metals used, colours applied, technologies employed, and face values assigned, creating a diverse and remarkable array of numismatic creations that increase in value over the years.
Q: You explained the history of coinage. How are CBSL currency notes printed?
A: Since its establishment, the CBSL has introduced 11 different denominations of currency notes. These include notes featuring portraits and themes that reflect the nation’s history and identity. Notable releases encompass those depicting King George VI (1951), Queen Elizabeth II (1952), a Ceylon emblem-themed design (1956), and a tribute to Prime Minister S. W. R. D. Bandaranaike (1962), notes featuring a sculpture believed to depict King Parakramabahu at Polonnaruwa (1965), notes showcasing the new state emblem of Sri Lanka (1975), a note highlighting the rich wildlife and flora (1979), and another featuring historical and archaeological motifs (1981) and many others. Our currency notes from Rs.20 to Rs.5,000 have the best security and anti-counterfeit measures features on par with those issued by Central Banks in developed countries.
Q: Is it accurate to claim that the CBSL has halved the issuance of coins and notes for public circulation?
A: Such an assertion is entirely false. We uphold ample reserves of cash to fulfill the requirements for both notes and coins, addressing the needs of the nation’s populace.
Q: There is speculation suggesting a potential limitation in the country’s currency reserves. Is there any truth in this?
A: The CBSL has indeed curtailed the acceptance of cash as bulk deposits from licensed commercial banks. This strategic move was undertaken with the aim of fostering a more advantageous financial landscape, and it has yielded positive results. However, without a comprehensive grasp of this initiative, there might be misconceptions regarding a reduction in deposits. It is important to note that this perspective does not encapsulate the entirety of the country’s payment-settlement requirements.
Q: Is there any concern regarding the existing state of currency circulation within the country?
A: Absolutely not. The populace’s requirement for coins and notes has progressively surged. Throughout the year, there is a substantial upsurge in demand, notably in April and slightly again in December. This demand pattern is influenced by consumer trends, as people require more currency during festive times like New Year and Christmas, leading to increased circulation.
Q: Has the CBSL reduced the issuance of currency notes and coins?
A: As a consequence of our strategic choice to facilitate the direct exchange of reusable currency notes between licensed banks, without introducing new stocks of currency notes during the Covid-19 pandemic, the issuance of currency notes witnessed a decrease. However, it is important to underscore that this reduction has not led to any hindrance or neglect in the flow of currency within the nation.
Under this approach, all coins and notes, regardless of their age, retain full usability akin to new ones. As a result, this method has allowed for a heightened utilisation of coins and notes in circulation. In essence, while the issuance of coins indeed experienced a decrease, it did not impede the efficiency of transactions.
Q: Are people reaping advantages from the decreased operational expenses resulting from the effective circulation of an ample money stock?
A: As the operational costs of the CBSL decrease, the surplus funds are eventually channelled to the Treasury. Subsequently, these funds contribute to the nation’s welfare and development initiatives, directly benefiting both the country and its citizens.