Sunday Times - Sri Lanka 2005 December 18th - Plus 2 - Page 1

The Central Bank has issued new coins for the country but how useful will they be, asks Kavan Ratnatunga

Changing Sizes of Lankan Coins

On 2005 December 14th, after months of planning the Central Bank of Sri Lanka issued new sizes for the 2005 25-cent 50-cent and one rupee coins. The new coins are in a different color to help distinguish them from the old coins which will circulate alongside untill they gradually disappear from circulation.

The 2-rupee and 5-rupee coins have changed in composition, but have been kept the same size and shape in order not to necessitate a change in coin operated equipment such as telephone call boxes.

The 5 rupee and 2 rupee coins which were of nickel-brass and cupro-nickel, since they were first issued in 1984 have changed to brass and nickel plated steel coins. Such a change occurred in 1996 for the 1 rupee, 50 cents and 25 cents coins when they changed from cupro-nickel to nickel plated steel coins. But this change was hardly noticed by the public since the weight, size, shape and color of the coins remained unchanged. The change can however be noticed by the attraction of the newer steel coins to a magnet.

The new 5 rupee coin and 2 rupee coin which are the same size at 23.5 mm and 28.5 mm in diameter are however 19.0% and 15.6% lighter in weight respectively than the current coins.


Central Bank Assistant Governor Rose Cooray hold up a packet of freshly-minted coins as she addresses a news conference last Wednesday.
(AFP/Sena Vidanagama).

The new one rupee brass plated steel coin with an alternate milled and plane edge is 20 mm in diameter and 3.65 grams. It is smaller in both size and weight then both the current 1 rupee coin at 25.4 mm and 7.13 grams and current 50 cent coins at 21.5 mm and 5.51 grams.
The new 50 cent copper plated steel coin with a milled edge at 18 mm in diameter and 2.5 grams is the same diameter but lighter than the current 25 cents which is 3.24 grams.
The new 25 cent copper plated steel coin with a plane edge at 16 mm in diameter and 1.68 grams is the same diameter as the current aluminum 1 cent coin which does not circulate.

The diameter of these low denomination coins have reduced by about 20% and the weight by about 50%.

The smaller aluminum 1, 2, 5, and 10 cents denominations will not be issued. They were last minted over 10 years ago in 1994, 1978, 1991 and 1991 respectively. Although still legal tender they are hardly seen in circulation and rarely issued by the Central Bank since the cost of minting them and even the scrap value of aluminum far exceed the face value.

It is rarely that any country changes the size or shape of currency in circulation. Most denominations have had a changes to cheaper metals and became lighter, some were demonetized and withdrawn from circulation but the size and shape remained the same. Though the Central Bank has over the years issued commemorative coins of varied size and shapes, there have been only only three other significant changes in the size or shape of a coin since decimal currency was first issued for Ceylon back in 1870.

The Queen Victoria copper round 5 cent penny size coin 34 mm in diameter and 18.9 grams in weight was demonetized effective 1910 July 1st and replaced in 1909 with a much smaller square cupro-nickel 18.5 mm in width, 3.88 gram coin.

During WWII the George the Sixth silver round 10 cent coin 15.5 mm in diameter and 1.116 gram in weight was demonetized effective 1943 February 28th and replaced in 1944 with a 6 scallop nickel-brass 23.1 mm in diameter and 4.21 gram coin.

The George the Sixth copper round 1 cent coin 22.5 mm in diameter and 2.362 gram in weight was removed from circulation an replaced in 1963 with aluminum cent 16 mm in diameter and 0.70 gram coin.

Inflation causes the value of the Lankan rupee to go down by a factor of 10 about every 22 years. i.e. a factor of a 1000 in 66 years. For example in the early 1940s a gold sovereign was worth about Rs. 13 and now it is over Rs. 13,000/-. When the quarter cent was demonetized in 1910 and the half cent in 1941 they were worth about 5 current rupees.

Practically all items are now priced in whole rupees so the new 25 cent and 50 cent coins have been issued long after they should have been removed from circulation. One rarely sees fractional rupee coins in circulation in Lanka since even bus fares use whole rupee prices. Change of even a Rupee is not often returned and ignored. Fractions of Rupee are now hardly of any value and even a beggar will probably scold you if you toss him a coin of lesser value. As the cost of minting Lankan coins is now much higher than their face value, it is probably time now to get rid of all cents coins in Lanka.

The difference between the face value of coins and the local value of the metal they contained plus the cost of minting the coins is known as seignorage and represents the profit or loss to the Bank issuing the coins.

Until just before WWII the face value of coins was only slightly more then the local value of the metal they contained. The difference paid for the cost of minting the coin. Copper coins were large and heavy. In Ceylon Denominations above 10 cents were minted in Silver. To simplify physical transport of large amounts of money, currency notes were issued with a Promise to pay the bearer on demand with reserve gold and silver stocks held in the Bank.

In 1941 during WWII after the Ceylon Government was no longer able to back the currency it printed with silver or gold. The statement of currency notes change to say they were legal tender for the payment of any amount, and the Silver coins were demonetized and replaced first with fractional paper currency notes legal tender for payment of a sum not exceeding Five Rupees and then later with Brass coins.

As the value of Brass in the coins which were introduced during WWII cost more than face value, they were replaced first by Aluminum and Cupro-Nickel in 1963, and 1978, and more recently in 1996 by nickel plated steel.

Coins last 10 times longer than currency notes which in few years gets dirty and torn and needs to be replaced. If most coins returned to the Bank, then their would be no need to mint more of them. However very many of them get saved in large hoards in boxes that collect offering at places of religious worship, or even in the homes of the public who see little value in returning them.

A newspaper advertisement by CBSL on 2005 January 2nd, called for Expression of Interest for minting and supply of Sri Lanka Coins. The tender to mint the Rs. 427.5 Million of 2005 coins was awarded again to the Royal Mint in UK which has minted most of the Sri Lanka coins since 1959.

With Electronic transfers for many transactions we are heading toward a coin and currency less society. However that is in the distant third world future.

Author maintains an educational website on two thousand years of Lankan coins at http://coins.lakdiva.org/, and is a life member of the Sri Lanka Numismatic Society.


This text is a copy of Changing Faces By Kavan Ratnatunga which appeared in the SundayTimes of Sri Lanka on 2005 December 18th. The eEdition online doesn't have the Plus 2 section of the printed copy.

My original article New Coin types for Lanka was edited above to match more closely the printed version. I however changed for example the title of this online version to Changing Sizes since the face of the coins did not change.

In late January 2005, a few weeks after the CBSL Advertisment calling for expression of interest in minting of 2005 coins I sent my recomendations to the CBSL Currency Department.

Other Press Reports online.

The coins were first announced on Television News on 2005 December 13th being shown to President Mahinda Rajapakse, who had then released the news to the media. Specimens of these new coins had been available at least since late October long before the election of the President on 2005 November 17th.

The 5 uncirculated Sri Lankans coins sealed within a Foreign plastic pack designed for 10 coins as seen above in the hand of Assistant Governor Rose Cooray was packed by Royal Mint for educational use.
The Rupee, 50 cents and 25 cents coins were first issued from the CBSL cash counter at 1:30 PM on 2005 December 14th after the CBSL Press conference that morning. This limited issue was on orders of the Governor of the Central Bank of Sri Lanka. The release was not preannounced. The Security at CBSL cash Counter did not know just 15 minutes before the release. The coins of the three denominations were hand counted from three plastic bags and released to the few persons including myself in the queue that soon formed, since it was a very slow process.

Each of the Mint sealed Plastic bags had Rs1000/- worth of coins for the cent values and 1000 coins for the rupee denominations. i.e. 4000 25c; 2000 50c; and 1000 each for Rs1, Rs2 and Rs5 coins. A small white paper tag pasted outside the bag has the date and time of packaging as well as the checked weight. All of the datesI saw are in early 2005 October, a few weeks before I saw samples at CBSL.


Author at CBSL counter AFP

I got a copy of the Official CBSL Press Release and affixed Rupee, 50 cents and 25 cents stamps on it and had it postmarked at the Philatelic Bureau on the day of the issue to create a unique souvenir. The 25 cent Stamp which is no longer issued was difficult to obtain.

The Rupees 2 coin was issued on 2005 December 22nd. The CBSL cash counter was still hand counting and releasing a limited Rs50/- worth to each person in the short queue. Mostly bank employees since the public need an appointment to get into the bank. Larger orders they requested we obtain from the commercial Banks. Note that the hand counting leaves finger prints on many coins which stained along the print in few days. I found a brass plated 25c coin I carried in loose change in pocket had corrosion spots.

Probably to minimise cost the quality of production has been cheap. See note of error coins.

According to a statement reported to have been made at the Press Conference
The lower denomination coin are popularly used as washers after drilling a hole in the middle
This is probably an age old practice and I have seen examples of Coffee Tokens with a drilled hole used as Tags. It probably explains some of the damage seen on old copper dumps.

while some five rupee coins are smuggled to London where vending machines can be fooled into accepting it as a one pound coin.
The British Pound is 9.5 grams and 22.5 mm in diameter. The Lankan Rs5 coin is 23.5 mm in diameter and was of the same weight, which is probably why the new issue at 7.7 grams is 19% lighter. That is probably sufficiently lighter for coin machines to identify it as not a pound. If the Rs5/- coin was shaved to the diameter of the British Pound it is only 8.33% lighter.