How to exchange USD for Sri Lankan rupees at the airport and get the best exchange rate?

After passing passport control there's another exchange counter, but it's hidden — you need to ask airport staff for directions. The commission there is fixed at 500 rupees regardless of the exchange amount, and if you show a receipt of currency purchase from the same airport, there's no commission at all. Recently exchanged $75 in mixed bills at a rate just above 340 rupees per dollar. Note: small bills are checked carefully for damage — a $20 bill with a minor tear was rejected at the nearby duty-free shop.

You can exchange currency at the airport without any special permit, with a fixed 500 rupee commission. They mainly give out large denomination bills, though the exact mix depends on the amount exchanged.

It's better to carry rupees — they're accepted everywhere, while dollars are often refused. For example, you can't pay in dollars at supermarkets, and at chains like Cargills you might technically be allowed to pay in USD, but they almost certainly won't have change in dollars, so you'll either not get change or they'll just decline the payment.

There are plenty of ATMs in Sri Lanka, but whether they work with foreign cards depends on the bank and payment system — some ATMs will accept and dispense cash for your card, others won't, so it's worth carrying cards from a couple of different payment networks just in case.