Cash Circulation Hits Record High Despite Rise in Digital Payments
- CNL Reporter
- May 8, 2025
- News
- Digital Payments
- 0 Comments
The Central Bank has reported a 14.5% year-on-year surge in cash circulation in 2024, reaching a post-pandemic high of Rs.1.36 trillion by the fourth quarter—up from Rs.1.19 trillion in 2023.
This increase reflects a continued public preference for physical currency despite growing digital payment adoption.
Notably, cash circulation did not peak during the second quarter as it typically does around the Sinhala and Tamil New Year, but steadily rose throughout the year. Of the total, Rs.1.05 trillion (77.4%) was held by the public, marking a rise compared to the 71–76% range in previous years.
Analysts warn that large volumes of cash outside banks may limit lending capacity and hamper economic growth. Cultural habits, limited rural digital access, and reliance on cash in informal sectors are cited as key reasons. While smaller denominations are widely used, the Rs.5000 note accounts for 78.5% of total cash value.
