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Sri Lanka to issue Rs5,000 note

Dec 16, 2010 (LBO) - Sri Lanka's central bank plans to print and issue a 5,000-rupee note from next February, deputy governor K G G D Dheerasinghe said.
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The bank will stop printing a 2,000-rupee note when the new 5,000-rupee note enters money circulation to coincide with its 60th anniversary.

The 2,000-rupee note was considered too big to fit into wallets and did not get a favourable response from the public when it entered circulation.

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"Public acceptance of the 2,000-rupee note was not very good when it entered circulation," Dheerasinghe told Vimasuma.com, our sister news website.

"That's why we had decided to print the 5,000-rupee note. We stopped printing the 200-rupee note earlier for the same reason.

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"

Money circulation had increased sharply in the island's north and east after the end of its 30-year ethnic war in May 2009, Dheerasinghe said.

"That's because the economy of these two regions is almost entirely cash-based.


As a result, after the war, money circulation in these areas went up by about 50 billion rupees."

The northern and eastern regions were devastated by the war with most infrastructure damaged or destroyed.

Dheerasinghe also said the issue of the higher denomination note was not s sign of runaway inflation.

"We want to stress that printing of the 5,000-rupee note is not a sign that inflation is going up," Dheerasinghe said, adding that the regulator was confident of preventing inflation rising above the current rate of six percent.

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