The local currency is the Sri Lankan Rupee LKR, and all transactions are in this currency, even if you are quoted USD, Euro or GBP. Amounts over LKR 5000 are not allowed to be either brought in or taken out of the country.
You may bring in a total of USD15,000 equivalent without declaring it however if you intend to take the equivalent of USD 5000 with you when you depart, you should declare any amount brought in on your arrival.
Indian currency, INR cannot be exchanged at banks. Licensed money changers or jewellery shops will help you with this currrency.
There are bank desks in the Arrivals hall where you can exchange GBP, AUD, USD, Euro, CAD to rupees. It’s a good idea to get some lower value notes RS100, Rs200 for tips and bigger amounts of Rs2000 and Rs5000 to avoid a fat wallet. Be very careful when handing LKR notes over because they look very similar.
Banks will change your overseas currency however often your passport is required as well as an inordinate amount of time. I use licensed money changers however count your money very carefully before you leave the counter to check that smaller value look alike notes haven’t been included. Hasn’t happened to me in fifty years however there’s always a first time and others have reported this trick. I use the side street money changers and won’t go in if they have several customers. Be aware of who is where and what they are doing.
ATMs are more common now although Ella, for example, has only one and most cards can be used. Work out how many RUPEES you wish to get before you put your card in to avoid thinking in the wrong currency and needing to make multiple transactions which may attract extra bank fees and possible lock out. Recently there was a problem when ATMs were shut down because of high level fraud and tourists were stuck for cash and had to make use of the convenient hotel exchange service at a very disadvantageous rate. Make sure that you tell your bank that you will be using your card in Sri Lanka before you leave home to avoid the bank blocking it on your first transaction.
Travellers’ cheques are a thing of the past and quite unusable.
Credit Cards can be used in higher starred hotels however using them at restaurants is very risky. While there seems to have been a decline in cloning, do not take your eyes off your card while the transaction is being processed. If you do use your credit card you may need to be assertive about this to avoid back office processing. Local people are now using credit and debit cards in well known supermarkets – worth a try if you wish.
Tip: keep your receipts when you change money so that you can exchange unused rupees for USD etc at the airport. Note that there is just ONE point where you can do this and it’s in the corridor BEFORE you enter the Departures Hall.