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 2,196,076 checks by April 2020 to 1,256,080 checks by April 2021. Moreover, the value of total cleared checks declined yearly by 27.32% to reach $13.82B by April 2021.
In details, the value of checks in LBP dropped by 11.64% year-on-year (YOY) to reach $5,869M, while value of checks in foreign currencies decreased by 35.73% YOY to reach $7,955M, by April 2021.
The volumes of cleared checks denominated in Lebanese Pounds and foreign currencies witnessed significant yearly drops of 48.04% and 37.70% to settle at 563,419 checks and 692,661 checks, respectively by April 2021.
Accordingly, the dollarization of cleared checks in terms of value went down from last year’s 65.08% to 57.54% by April 2021. However, the dollarization rate of checks in terms of volume rose from last year’s 50.62% to 55.14% by March 2021.
Notably, the number of returned checks fell by a substantial 82.71% YOY to 11,151 checks while the value of the returned checks retreated by 58% YOY over the same period to reach $181M by April 2021. However, the decline in 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 weaker confidence in the banking sector.
Value of Cleared Checks by Currency, by April (in $B)