Sri Lankan Foreign Minister Ali Sabry has stated that his country was exploring the possibility of allowing the usage of the Indian currency for local transactions, just like the US dollar, Chinese renminbi, yen, euro, and Swiss Franc, among others.
The minister revealed this while briefing the media on the Sri Lankan president's trip to India.
Earlier this month, Sri Lanka formally included the Indian rupee as a designated foreign currency.
So far, the island country has designated 15 foreign currencies.
The minister said the move to allow the use of its neighbour’s currency would enable “tourists and other people from India to directly use Indian rupees here” without going through the hassle of multiple currency conversions.
On Friday, India and Sri Lanka signed a network-to-network agreement to launch New Delhi’s domestic digital payments platform the Unified Payments Interface (UPI) in Sri Lanka.
India has provided $4 billion worth of financial and humanitarian support to the crisis-hit island nation over the last two years and emerged as one of the biggest lenders to the country.
On Friday, the two countries noted that the decision to designate INR as currency for trade settlements between the two countries has forged stronger and mutually-beneficial commercial linkages. Both agreed to operationalize Unified Payments Interface-based digital payments to further enhance trade and transactions between businesses and common people.