Sri Lanka sees rising currency demand amid festivities and elections

Sri Lanka’s economy witnessed a rise in currency in circulation (CIC) throughout 2024, fueled by seasonal demand and the start of the election cycle, the Central Bank of Sri Lanka (CBSL) reported.

    

The CBSL injected Rs. 163.0 billion into the economy during the March 2024 festive period, of which Rs. 87.8 billion was returned by April 2024. By September 2024, currency in circulation began rising again as elections drew closer, reflecting an increased reliance on cash transactions.

Economic factors, including lower deposit interest rates and higher taxes, contributed to this trend, as more people opted to hold currency. December saw Rs. 46.5 billion in net withdrawals, driven by holiday-related spending.