Sri Lanka issues 10 rupee coin series
Nov 17, 2014 (EconomyNext) – Sri Lanka has issued 25 coins depicting the administrative districts of the island, minted at the Mincovna Kreminica in the Slovak Republic.
The designs on the coins were chosen following call for public suggestions, the Central Bank said.
When Sri Lanka’s money printing Central Bank was set up in 1951 by then finance minister J R Jayawardene abolishing a currency board arrangement, US dollar was worth 4.76 rupees.
At the time Sri Lanka had coins as small as one cent.
In subsequent years money printing reduced the value of the currency to 130 to the dollar with the last devaluation occurring in 2012, due to credit-funded fuel subsidies ultimately accommodated with Central Bank credit through sterilized foreign exchange sales.
The smallest coin minted recently is 25 cents.
In the early 1980s the Central Bank shifted to minting 5 and 10 cents coins in aluminum instead of bronze amid heavy deficit spending and currency depreciation by an administration headed by Jayawardene, who was now President.
The inflation in the period was compounded by the 1970s ‘Great Inflation’ period fired by the US Federal Reserve which led to a commodity bubble, making copper and bronze coins more valuable than the face value.
Following the 2009 bubble fired by the Fed, Sri Lanka shifted to using plated iron for larger denomination coins such as two rupees from the earlier nickel and cupro-nickel.