Can I use USD in Colombo shops?

No, you generally cannot just use US Dollars for everyday shopping in Colombo, because the Sri Lankan Rupee (LKR) is the only legal tender accepted by regular retail spots, supermarkets, and most local eateries. So for normal transactions, you really need to exchange your currency first, or just go with a credit card.

Now, some places are a bit different; for example, high-end luxury hotels, major gem and jewellery merchants, and a few licensed tour operators might accept USD. But the exchange rate they give is usually not great, rarely in your favour, so it can feel a little pointless. For day-to-day spending, it is better to withdraw LKR from local ATMs or use authorised money changers that are scattered around Colombo, so you get the official, fair market exchange rate instead of a “special” one.