History of Currency in Sri Lanka

Sri Lanka is a country with a long history and a similarly long and rich economic history. A study of that history will doubtlessly prove fruitful not only for economists but for everyone in the society. Coins used through different time periods of a country play an important role when studying the history of that country. Although small in size, a coin has the ability of giving a wealth of information about the economic and cultural history of the country where it was used, through signs that remain on them.

In the past, Sri Lanka managed to garner the attention of the world partly due to the fact that it was uniquely placed at the center of the Silk Road that spanned from Far East Asia to Europe. It was also a doorway to entering the Overland Silk Road. Traders and explorers from the East and West would converge on this island. Sri Lanka functioned as a trading center for these travelers. There are Greek, Roman and Chinese texts that include a multitude of information that serve as testament to this.

These facts reveal the Economic history of Sri Lanka. Upon close inspection of the great irrigation projects of those times, it becomes clear that the disciplines of engineering and agriculture were highly developed in Sri Lanka. The island also had an efficient trading system in place.

Information detailing these endeavors can be found in epigraphs, ‘Vansha Katha’ (Chronicles of Dynasties), ancient texts and letters as well as in archeological evidence. Coins and epigraphs have a special place among this evidence. Being primary pieces of evidence regarding the economic history of Sri Lanka, these coins and epigraphs can be found in large numbers scattered across the island. Aside from local sources, afore mentioned records by international traders and foreigners also provide information about the trade mechanisms of Sri Lanka’s past. This information is extremely advantageous in the attempt to construct a timeline for the history of Sri Lanka’s economy.

Sri Lanka’s currency-use can be divided into following periods.

1. Anuradhapura Era
2. Polonnaruwa to Kotte Era
3. Kandy Era
   
4. Colonial Era
5. Post-Independence Period since Establishment of the Central Bank of Ceylon

Coins used in Anuradhapura Era

1.  Kahapana
2.  Swastika coins
3.  Maneless Lion coins
4.  Lakshmi Plaques
5.  Kahavanu or Lankeshvara coin 
6.  Foreign Coins 
7. Kahapana 

Kahapana

The earliest unit of currency known in the island is referred to as a Kahapana. They are called puranas in Sanskrit and eldings in English. They are commonly known as punch marked coins, due to the marks or symbols that had been struck either on one side or both sides of the coin. Kahapanas are reckoned to have been produced by cutting strips of metal from hammered sheets. The known coins have been of many shapes, such as round, square, rectangular or oblong. Their weight had been adjusted by clipping the corners. The metal of the Kahapana has been found mostly to be silver.

Swasthika Coins

Apart from the ‘Kahapana’ coin with its many markings, other types of coins were also used during the Anuradhapura era. The tusker and swastika coin is one such type. It is a small Copper coin. A chosen few markings that occasionally appeared on the ‘Kahapana’ were added in the making of this particular coin.

On one side of the coin, there is an image of a walking tusker, a stupa drawn using three half moons, a swastika and a Bo tree with three branches inscribed in a square. On the flipside, there is a swastika, a trident and a stupa. However, when considering the coin as a unit of currency, it is probable that it was in the same category as a ‘Kahapana’.

Foreign Coins to Anuradhapura

Clear proof that Sri Lanka was a functioning naval base in the past comes from the foreign coins used during the Anuradhapura era. A great number of Greek, Roman, Chinese, Arabic and Indian coins used in international trade were found in Anuradhapura, Mihintale, Sigiriya, Kurunegala, Matara, Akurugoda and Badulla.

Chinese Coins

These coins are made of Copper or Copper-rich alloys. Coins minted in different eras are different in size as well. The coins are circular with a squareshaped hole in the center. The Chinese Emperor’s name is engraved in Chinese calligraphy along the four sides of the square. There are no markings or images on the flipside of the coin.

Arabic Coins

These coins are minted using metals such as copper and silver. On the face, there are devotional phrases in Arabic. The year of issue is inscribed on the flipside.

Polonnaruwa to Kotte Era

Coins used in Polonnaruwa to Kotte Era

1.      Massa Coins

2.      Dambadeni Coins / Coins of the Middle Ages

3.      Lion Coins

4.      Cetu Coins

Massa Coins

King Vijayabahu I who was responsible for toppling of the Chola dynasty, uniting the country and the inception of the Polonnaruwa Kingdom; also produced ‘Kahawanu’. He added his name to the face of the coin. Thus he is the first Sinhalese King to have had his name engraved on coins that were issued during his reign. This coin was known as ‘Massa’.

The practice of engraving the name of the King on coins continued from the beginning of the Polonnaruwa era until the end of the Dambadeni era. The coins that belonged to the period of the Polonnaruwa Kingdom bore the name of the King responsible for their production in ’Naagari Akshara’ or ‘Naagari characters’. Thus the name of King Vijayabahu appeared on the coin as Sri Vijayabahu, King Parakramabahu as Sri Parakramabahu, Chodaganga as Sri Chodagangadeva, Queen Leelawathi as Sri Raja Leelawathi, King Sahassamalla as Sri Sahasamalla, Dharmashoka as Sri Dharmashokadeva, and Bhuwanekabahu as Sri Bhuwanekabahu. But King Nishankamalla’s name appeared as Sri Kaligalakeja.

When names of kings Vijayabahu and Parakramabahu appear on coins, there is no specification as to which Vijayabahu or Parakramabahu it was. Only the name appears in same way in Naagari letters. In particular, Queen Leelawathi was in power in three different periods but there is no way of knowing which coins bearing her name came from which of the three periods.

Coins produced under Chola kings such as Rajaraja I (985-1016 A.D), Rajendra I (1012-1044 A.D) and Rajadhiraja I (1018-1054) as well as under Pandya Kings were used during the Polonnaruwa Era. In addition, the use of coins minted under the kings of the Chinese Sun dynasty as well as the use of Arabic coins during this era indicates that Sri Lanka engaged in international trade in the Polonnaruwa era just as it did in the Anuradhapura era.

Kandy Era

Coins used in Kandy Era

• Angutu Massa/Koku Coins/ Laarin
• Dambadeni kasi
• Salli
• Indian ‘Waragama’
• Tuttu
• Panama
• Tangama

In the 10th century, a gold coin known as ‘Masuran’ was used in transactions. Because gold is a rare and precious metal, the ‘Masuran’ gradually went out of use.

Therefore by the 13th century, the term ‘Masuran’ referred instead to a type of copper coin.

By the end of the 16th century, two types of Silver coins ‘Ridi (Massa)’ and ‘Panama’ came into use. But by this time, the gold coins ‘Ran Panam’ and ‘Ran massa’ were somewhat already in use. Later the ‘Thangam Massa’, ‘Podi (small) Thangama’, ‘Ridiya’ came in to use. In the 18th century, the Indian ‘Waragama’ was utilized in Sri Lanka.

Around the same time, the copper coin ‘Salli’ was also used for transactions. One ‘Ridiya’ was worth 64 ‘Salli’ coins. Another contemporary coin was the Dutch ‘Stuiver’ which was used in the Hill Country Kingdom. The people of Sinhale called these coins ‘Thuttu’. Source: “Udarata Maha Keralla” – Professor Tennakon Wimalananda.

In addition, a large variety of coins such as Larin, Dambadeni coins and Thangama were in use during the Kandy era.

Angutu Massa coin was in use during the Kandy and Kotte periods and had a silver finish. It is believed that these hook-shaped coins were brought to Sri Lanka by vendors from Persia. These Persian coins were also known as “Laarin”. Records of Robert Knox’s experiences in Sri Lanka mention that these coins were minted and circulated by Kings of the Kandy era.

Colonial Era

Even though we divided Sri Lanka’s past into eras such as Anuradhapura, Polonnaruwa and Kandy; in all those eras, the entirety of Sri Lanka was never governed by one King. In different instances, the island was invaded by foreign powers. However, until the Kotte Era, the only invaders were the Chola. Despite such instabilities, we were able to make profits through international trade (via the Silk Road), win praise and maintain our splendid international reputation. But in 1453 A.D, the situation changed as a consequence of the fall of Constantinople (Capital of the Byzantine Empire). Europeans began to seek a route to the East over the great ocean. Eventually, the Europeans were victorious in the East and the West. As a result, Sri Lanka was colonized by the Portuguese, the Dutch and the English respectively.

Malacca

The Portugal Coat of Arms appears on one side of the Malacca coin. On either side of the seal the letters AM, MA or DM can be seen. AM is the abbreviation for Asian Malacca. Similarly, MA and DM are abbreviations for Malacca and De Malacca respectively. To indicate that it is Thangam;, the letters A and T appear superimposed on the flipside of the coin. On the same side, the year of production is also stated.

The Portuguese minted some of these coins in Goa specifically to be used in Sri Lanka. These particular coins have the Portuguese Coat of Arms flanked by the letters GA on one side and the letters DS (superimposed) on the opposite side. DS is an abbreviation for ‘De Seylao’ which was the term used for Sri Lanka.

Gini Massa

The coin ‘Gini Maessa’ is commonly known as ‘Gini Massa’. There is an inscription of a gridiron on its flipside. Therefore this coin should be known as “Gini Maessa” which means gridiron in Sinhala. The Portuguese landed on this island in 1505 A.D. Before their immediate departure, they had a small fortress

constructed in Colombo in the name of Saint Lawrence. He had departed this life while burning on a gridiron. Therefore Gini Maessa coins were minted and issued in memory of his final moments. It is possible that this was the first commemorative coin issued by people of the West in Sri Lanka. Gini Maessa coins were issued as Thangama coins in 1640 and Dvi Thangama coins in 1645.

The First Bank Note

Up until the last half of Dutch Sri Lanka, only coins were used in transactions. But in the final years of the 1700s, Dutch security expenditure increased exponentially. The expenditure vastly surpassed income and almost emptied the treasury. The birth of the banknote took place against this backdrop.

So on March 19, 1785 banknotes equivalent to 25,000 Pathaga were authorized for printing. Accordingly, Sri Lanka’s first series of banknotes was issued on the 10th of May, 1785. The first notes had values equivalent to 50, 100, 500 and 1000 Pathaga. Afterwards, notes of 1,2,3,4,5,10 Pathaga were also printed. These notes contained the signatures of three government officials.

During the British period, notes were issued by three authorities

1.  Notes Issued by the General Treasury (1827 – 1855) - Pound Notes

     One pound

     Two pounds

     Five pounds

2.  Notes issued by the Private Banks, namely, (1844 – 1884)

     The Oriental Bank Corporation

     The Chartered Mercantile Bank of India, London and China.

     Hong Kong and Shanghai Banking Corporation

     Asiatic Banking Corporation    

(i)    Pound notes

(ii)   Rupee notes

3.  Notes issued by the Board of Commissioners of Currency (Under Government of Ceylon) (1884 – 1950)

     The Board of Commissioners consisted of

          The Treasurer

          Colonial Secretary                                                   

          Auditor General

Post Independence Period Since Establishment of the Central Bank of Ceylon

The Central Bank of Ceylon was established on 28th August 1950 in terms of the Monetary Law Act No. 58 of 1949. The Monetary Law Act provided for establishment of a Monetary Board to administer, among other things, the issue of currency, which included both notes and coins.

Coins issued by the Central Bank of Ceylon

The notes issued by the British were used in Ceylon up to 1951 and the coins were used up to 1963. The first Sri Lankan coin series was introduced in 1963. The Emblem of Ceylon was introduced in the obverse of this coin series. This series consisted of coins in the denominations of:

• One cent (aluminium)
• Two cents (aluminium)
• Five cents (brass)
• Ten cents (brass)
• Twenty-five cents (copper / nickel)
• Fifty cents (copper / nickel)
• One rupee (copper / nickel)

• Rupees 5 (nickel / brass) and Rupees 2 (copper / nickel) circulation coins were introduced in 1984 instead of the five rupee and two rupee notes.

In 2005, the Central Bank issued a new series of circulation coins of Rs.5 and Rs.2 by changing their weight and alloy, while Re. 1, Cts 50 and Cts.25 coins were issued by changing the size, alloy, weight and colour.  These new coins are circulating along with the previous issued coins.