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 2,496,338 checks by March 2020 to 911,785 checks by March 2021. Moreover, the value of total cleared checks declined yearly by 37.81% to reach $9.99B by March 2021.
In details, the value of checks in LBP dropped by 26.49% year-on-year (YOY) to reach $4,150M, while value of checks in foreign currencies decreased by 43.94% YOY to reach $5,847M, by March 2021.
The volumes of cleared checks denominated in Lebanese Pounds and foreign currencies witnessed significant yearly drops of 54.37% and 47.63% to settle at 404,595 checks and 507,280 checks, respectively by March 2021.
Accordingly, the dollarization of cleared checks in terms of value went down from last year’s 64.88% to 58.49% by January 2021. However, the dollarization rate of checks in terms of volume rose from last year’s 52.21% to 55.63% by March 2021.
Notably, the number of returned checks fell by a substantial 82.89% YOY to 8,522 checks while the value of the returned checks retreated by 57.58% YOY over the same period to reach $139M by March 2021. However, the decline on returned check cannot be considered as positive indicator. In details, Lebanese economy is increasingly turning to cash economy as less and less traders are now accepting checks in dealing with commercial activities, due to the lack of confidence in the banking sector.
Value of Cleared Checks by Currency, by March (in $B)