Sri Lanka – Cash or card?
In SriLanka make sure you have enough paper money for small items such as Tuk Tuk’s, train, bus fares, small eats – the local favorite.
Small hotels will appreciate US Dollars. Bigger hotels accept cash or card.
Money changers are in every high street. Shop around for the best deal.
You can get started with some local money on arrival at the airport, after passing through customs and getting your baggage. Visit each booth and get the best deal!
One of the topics tourists to Sri Lanka often face is the local money situation, which might differ from what one is used to in other tourist countries. Hence a number of topics to explain here.
1] In what currency to pay?
Simple answer: rupee or LKR. The USD is often used to ‘fix’ prices in as the rupee rate tends to slip over time, but in 99 out of 100 cases it is best to pay in rupee even if the price was in USD.
2] How to obtain rupees?
Here is a simple part and a more complex part. The simple one: don’t obtain (buy) LKR abroad. In most cases the rate is horribly bad, and the official limit for importing is a mere LKR 5,000. And another simple rule: whoever tells you that cash USD is easier to bring and exchange than e.g. EUR or GBP or Yen should immediately be sent to the North Pole ;-), such a person is not worth asking travel advice. Any ‘strong’ currency is okay, see also 5].
And the more complex question: through cash or through ATM (forget Traveller cheques, a thing of the past almost everywhere). This boils down to whichever is cheapest for you. But first some technical stuff: popular banks supporting foreign cards (Maestro logo) are Sampath, Commercial Bank, Hatton National Bank and in big cities HSBC and Standard Chartered. And do inform your own bank you are travelling in Sri Lanka, some block their cards standard for a region like this due to fraud risk!
Let’s take a ‘snapshot’ example from real life. This should allow you adapting to your own situation. Use http://www.sampath.lk/en/exchange-rates or http://www.combank.net/newweb/en/rates-tariffs/exchange-rates to see the current cash rate, for buying rupee from euro this is 152 (and for buying euros it’s 159). Now get the ‘interbank’ rate at a site like http://www.xe.com/ or http://www.oanda.com/, at same date this is 157. And add the knowledge that with ATM withdrawals one usually (depends on the bank!) gets 1% less than the interbank rate, so that would be 155 in this case. (Also beware, in some cases the ATM asks whether you want to be debited in rupees or in your card currency like GBP/Euro/Dollar; in almost all cases choose rupees, to avoid a bad exchange rate!) Now calculate as follows:
- A withdrawal of eur 200 would deliver you 31,000 LKR. Subtract from this the fee your own bank charges per withdrawal, e.g. 2 euro (on the cheap side); result is around 30,700 LKR
- Same euro 200 brought cash delivers you 30,400 LKR
So for this specific case the answer for the question ‘which is cheapest for you’ is the bank. With other bank fees or better cash rates (e.g. money changers), and also for smaller withdrawals assuming the fee is per withdrawal, the opposite result could follow. Also credit cards at ATM could have different fees, check with your bank or card issuer. Withdrawals used to be charged solely by our own bank, but now just like ATMs in e.g. petrol stations or malls in some Western countries the odd (to be shamed!) Lankan bank starts adding its own fees too. HNB (Rs 200 per transaction), Seylan Bank (again 200, plus a very monkey-inspired user interface with 8 confusing buttons to choose from) and Commercial Bank, with even Rs 300 per transaction, hence have become last choice for travellers – solely use when no other (and more affordable) ATMs nearby 🙁
A related question in case of the choice for ATM is the maximum allowed withdrawal amount. Just like the cost it’s determined both by your home bank and by the Lankan banks. Generally the allowed amount is at least Rs 40,000 or sometimes 60,000; newer ATM’s in Colombo often allow Rs 80,000 or more but for most foreign bank accounts that’s above the cap per transaction, ‘imposed to limit the risks of travellers in case of theft’. The cap per transaction might be lower than the cap per day, hence in some cases two withdrawals in a row are allowed!
3] Where to change cash?
If your trade-off would be cash, still there is a choice to be made: where to change. The answer is again ‘which is most convenient for you’:
- Hotels offer a great convenient service, BUT tend to charge their extra cost by giving quite a low rate. Hence only when the cost (or time) for you for going to an alternate place outweighs this loss it makes sense, normally just avoid and go to bank or changer.
- Banks offer a fair rate; this includes the airport banks, these are open 24h and 365 days and unlike many other countries offer same rate as banks in town.
- Licensed money changers (often jewelry shops) offer a slightly better rate than banks. But it varies with your notes (large notes a better rate, and slightly damaged notes not accepted). Also one needs to be more cautious here for rogue staff, e.g. inserting smaller rupee notes into a stack of large ones. Hence double count all, and make sure you get an official exchange slip.
Do not easily consider paying in a restaurant/shop with credit card, cash is the way to go; and if one uses card never loose sight of it as cloning is a serious risk.Also beware that technically shops/outlets are allowed to add a surcharge of 2-3% on any payment by foreign credit card; ask ahead whether they do so before choosing cc over cash!
Not so much for changing (except at money changers) but for any change you get during paying: beware rupee notes with something written on them. Officially per 2018 these are totally worthless, read here
4] What to do with leftover LKR?
As long as you can produce an ATM slip, bank exchange slip or licensed money changer slip for minimally the amount you have, you can re-exchange into e.g. USD or EUR. This happens at banks in the Departure zone of the airport.
5] Can notes of currency XYZ be exchanged?
Well a good indication for the question whether a market exists or not are the bank sites, e.g. the link given under 2]. If a currency is not listed ask in the TA forum or avoid risk by first swapping (at a cost!) to e.g. USD or GBP.
6] Are there import restrictions for cash?Well whether it’s wise safetywise to carry lots of cash instead of ATM cards is a personal choice. But technically one can carry upto USD 15,000 per person, or equivalent in other currency, without needing to declare at Customs at ariport. Higher amounts are allowed too but one must declare (and probably also give a reason for the planned expenses.)
7] What to do for Indian tourists?
Here is kind of special situation (probably similar for other South Asian currencies like Pakistan, Nepal, Bangladesh, Maldives though more research about the money changer market is needed).
Firstly, INR can since recent changes be exported from India upto INR 25,000. Still, due to Indian regulations also Lankan banks, and by implication all change outlets at the airport, are not allowed to change INR. Also the official Lankan Customs rules, again derived from the currency owning banks rules, forbid importing Indian and Pakistani rupees.
However, Lankan licensed money changers (also the few of them that are checked regularly on complying with the license 🙂 _are_ allowed to change INR, and generally give a decent rate too.
So for Indian (and other South Asian) tourists the advice is twofold.
A] Always bring a smallish amount of e.g. USD 50 to cash at the airport for the first day (as INR can’t be changed inside the airport)
B] For the subsequent part of the trip make the same ATM-versus-cash tradeoff as other tourists, it’s explained in 2]. It is a bit complicated by the fact that the rate (at changers) is not easy to find on the Internet, but a TA forum inquiry might help.
As all TA material, this Article / Top Question is ‘crowdsourced’ and open to alterations by all who get into the list of allowed gmail accounts; preferably after first discussing these in the Sri Lanka forum.