Flag of Sri Lanka
Sri Lanka has an impressive history. It is believed to have been inhabited by humans for more than 100,000 years. Originally inhabited by Vedda people, Sinhalese (the largest ethnicity in Sri Lanka) history starts with the arrival of Prince Vijaya - also known as Singha - in 543 BC, thought to have come from Bengal. He established the Kingdom of Tambapanni, the first of many kingdoms and dynasties in Sri Lanka that lasted until 1815.
The first Europeans in Sri Lanka were Portuguese in the early 16th century, who gradually expanded their hold on the coastal areas of the island. The Portuguese named the island Ceilão, from which Ceylon is derived. The Sinhalese struck a deal with the Dutch to expel the Portuguese in the early 17th century, but the result was that the coastal areas became Dutch instead of liberated.
The British took control of Ceylon during the Napoleonic Wars. Ceylon developed into a democracy in the 1930's, and a British dominion in 1948. In the 1960's the second largest ethnic group, the Tamils, started revolting against what they saw as Sinhalese dominance and suppression. The proclamation of the Republic of Sri Lanka in 1972 made things worse and a civil war broke out. This war ended in the early 2000's and since Sri Lanka became one of the fastest growing economies of the region, with textiles, tea and rubber as the main exports.
Currency
Old Ceylonese money was denominated in Fanam and Larin.
The first modern currency of Ceylon was the Rixdollar at the end of the 18th century. The Rixdollar was derived from a large silver Dutch coin worth 48 Stivers, and had a value similar to the Spanish 8 Reales or Mexican Peso. With the British taking over, a devalued Rixdollar (worth 1s6d instead of 4s2d) was made the official currency. The British did not wish to use subdivisions and issued coins with unusual denominations 1/192 and 1/96 Rixdollar, which was 1/4 and 1/2 of a Stiver or 1 and 2 Duit respectively.
In 1825 Pound Sterling was made the official currency across the whole British Empire. This led to coin shortages in Ceylon and in 1837 the Indian Rupee was introduced instead at a rate of 2 Shillings per Rupee.
A separate Ceylonese Rupee was first issued as paper money but from the 1870's also coins were struck for this currency. Unlike the Indian Rupee, the Ceylonese Rupee was decimalised in 100 Cents.
As silver prices dropped the Rupee was worth 1s6d ($0.36) until 1948, after which a peg of 3.3 Rupees per USD was used. This peg was adjusted to 6 Rupees/$ in 1967 and its value started floating in the 1970's. Civil war and economic hardship eroded a lot of value from the Rupee, but it currently trades at a relatively stable rate of around 130 Rupees/$.
Coins
I have never seen any Ceylonese coins from before 1870. The British era coins are in typical British Empire style. There is only one type with a portrait of Queen Elizabeth II, a 2 Cents from 1955. After that, a series was introduced without English legends. The Sri Lanka coins are only to be distinguished by the small difference in the Sinhalese legend on top of the denonination.
Current coins in circulation are 25, 50 Cents, 1, 2, 5 and 10 Rupees.
Roy wrote this excellent topic on Ceylon:
https://en.numista.com/forum/topic45673.html
Ceylon coins:
https://en.numista.com/catalogue/ceylan-1.html
Sri Lanka:
https://en.numista.com/catalogue/sri_lanka-1.html
