What currency to use in Sri Lanka? { Sri Lanka Currency Advice }

Sri Lanka, Tips

There is very little information available online about money exchange in Sri Lanka for Indian tourists. Most people recommend getting Indian Rupees exchanged for Dollars and then getting Dollars exchanged for Sri Lankan Rupees at the Colombo airport. From my experience of traveling in Sri Lanka, INR – USD – LKR is a great loss. This blogpost is a best practices guide on what currency to use in Sri Lanka and how.

Planning a vacation in Sri Lanka? Here’s a step by step guide to apply for the Sri Lanka ETA for Visa on Arrival.

What currency to use in Sri Lanka?

what currency to use in sri lanka - INR to LKR

Does Indian Rupee work in Sri Lanka?

Yes and No. Please read the points below on why there is no straight forward method to exchange INR to LKR.

  1. No bank or Forex exchange in Sri Lanka is authorized to change Indian Rupee or Pakistani Rupee.

  2. It is illegal to carry more than 25,000 INR out of India per person.

  3. Foreign currency import regulation: Amounts over USD 15,000 (or equivalent) must be fully declared to customs, except for Indian and Pakistan currencies which are prohibited. Amounts over USD 5,000 also have to be declared if intending to take it back. See this link by IATA for custom rules. Being an Indian traveller, however, you can take small amounts of Indian Rupees without any issues. Between the two of us, we carried INR 50,000 during our Sri Lanka travel.

What currency to use in Sri Lanka?

The question, persists – what currency to use in Sri Lanka? It looks like the safest option is to get your INR changed to Dollars and Dollars to LKR. But there is a problem with this method – it’s not economical. Let’s discuss the problem with this method and if this method actually is the best and most profitable proposition to go about obtaining LKR for your travel to Sri Lanka.

INR – USD – LKR method

The problem with the INR – USD – LKR method, is that you lose a lot of money in the process of double exchange. You also end up paying double commissions to the money exchanger.

INR – USD. Spend in USD

What about exchanging INR to USD and spending in Dollars directly? All countries accept Dollars, right? Well, the invoices quoted in USD will always take the exchange rate in consideration and you will will anyways, end up spending more than you would in the local currency. So this method does not work.

Forex card method

LKR is not an international currency and none of the banks have the option of converting your INR to LKR to a travel card. Travel / Forex cards will also give you an option to convert INR to Dollars. If you use your Dollar forex card to pay in LKR, there is again a double exchange. If you pay in Dollars directly, you pay extra. It is the same problem, here as well.

So how does one exchange Indian rupees in Sri Lanka without losing more money than necessary? Below are some tried and tested methods to exchange INR to LKR to get the best value for your Indian Rupee in Sri Lanka.

Best form of Travel money for Sri Lanka

Pay by Credit card / Debit card

You can activate your card for International transactions by giving them your travel details (to minimise fraudulent transactions). You can pay by your credit / debit card wherever possible in Sri Lanka (most hotels and restaurants and mall shops will have the facility to do this). The bank charges a 3.5% conversion charge on the amount spent in an International currency. The exchange rate is regulated and all banks will have the same exchange rate so, you need not worry about which bank card to be used. This is the best method to get your Indian Rupee converted to Sri Lankan Rupee without any hassles. This also gets you the best exchange rate with the least commission.

Changing money in Sri Lanka – INR to LKR

You will still need to spend in cash in the local currency in Sri Lanka – LKR. For this, I will suggest getting 50 USD changed at the airport for LKR and carrying INR 25,000 per person and getting this changed at jewellery shops across Sri Lanka. This is a perfectly legal way to get your INR exchanged to LKR. There are many shops in Kandy and Colombo who will do this for you. You can refer to this list of the best places to get Indian Rupee changed to Sri Lankan Rupee across Sri Lanka.

If you do not own a credit card / debit card, you can take a chance of carrying more than 25,000 Indian Rupees into Sri Lanka and getting it exchanged. I know many Indian tourists who have done this knowingly or unknowingly and there have been no issues with customs.

Book online and pay in INR

To save on the number of times that you will have to pay in LKR, you can make your hotel bookings online and pay in INR. Travel portals like MakeMyTrip, Yatra and Cleartrip will let you do this quite easily. AirBnb, Agoda and Booking.com usually have prices in USD and the Indian prices shown are conversions. This also works out well as these sites have great ongoing deals. The only problem is that most bookings are in USD and ‘pay at the hotel in local currency’.

Hope that this guide will help you decide on what currency to use in Sri Lanka during your travels to this paradise island. If you still have any unanswered questions, please leave them in the comments below and I’ll try my best to help you.

Planning a vacation in Sri Lanka? Here’s a step by step guide to apply for the Sri Lanka ETA for Visa on Arrival.


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