As per the data published by the Association of Lebanese Banks’ (ABL), the total number of cleared checks in the Lebanese financial system slumped from 9.93M checks by December 2019 to 5.85M checks by December 2020. Moreover, the value of total cleared checks declined yearly by a downtick of 5.53% to reach $53.82B by December 2020.
In details, the value of checks in LBP dropped by 9.97% year-on-year (YOY) to reach $19.94B, meanwhile value of checks in foreign currencies decreased by 2.71% YOY to reach $33.88B, in 2020.
The volumes of cleared checks denominated in Lebanese Pounds and foreign currencies witnessed significant yearly drops of 38.37% and 43.46% to settle at 2.86M checks and 2.99M checks, respectively by December 2020.
Looking at the average value per number of cleared checks, it increased from $5,737 in year 2019 to $9198 in year 2020 per check. This indicates that depositors tend to mitigate their locked deposits out of the banking sector towards real estate purchases, or to liquidate their checks in the black market on an average exchange rate of 2,630 LBP to 2,950 LBP per USD.
Accordingly, the dollarization of cleared checks in terms of value went up from last year’s 61.13% to 62.95% by December 2020. Meanwhile, the dollarization rate of checks in terms of volume fell from last year’s 53.32% to 51.17% by December 2020.
Notably, the number of returned checks fell by a substantial 66.97% YOY to 109,329 checks while the value of the returned checks retreated by 41.51% YOY over the same period to reach $958M by December 2020. This is a result of people dealing mostly with banker checks drawn on BDL and cannot be bounced back.
Yearly Number & Value of Cleared Checks (in $B)
Source: ABL, BLOMINVEST