The resurgence of the Sri Lankan currency follows a period of economic turmoil, highlighted by the nation's first-ever sovereign default in 2022. During this challenging period, Sri Lanka received crucial assistance from India, facilitating imports of essential goods and stabilizing the rupee through extended currency swaps provided by the Reserve Bank of India

Perez points to the government's burgeoning fiscal deficit, the absence of banknotes with higher denominations than 1,000 Cuban pesos (approximately $3 in the parallel market), persistently high inflation rates, and the reluctance of cash return to banks as key factors contributing to the shortage.