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 3,041,067 checks by June 2020 to 1,881,673 checks by June 2021. Moreover, the value of total cleared checks declined yearly by 22.12% to reach $20.61B by June 2021.
In details, the value of checks in LBP dropped by 3.05% year-on-year (YOY) to reach $9,224M, while value of checks in foreign currencies decreased by 32.84% YOY to reach $11,379M by June 2021.
The volumes of cleared checks denominated in Lebanese Pounds and foreign currencies witnessed significant yearly drops of 44.39% and 31.63% to settle at 860,238 checks and 1,021,435 checks, respectively by June 2021.
Accordingly, the dollarization of cleared checks in terms of value went up from last year’s 31.50% to 55.22% by June 2021. However, the dollarization rate of checks in terms of volume rose from last year’s 49.13% to 54.28% by June 2021.
Notably, the number of returned checks fell by a substantial 80.72% YOY to 15,361 checks while the value of the returned checks retreated by 51.64% YOY over the same period to reach $275M by June 2021. However, the decline in returned check cannot be considered as positive indicator, as checks are used less and less to conduct transactions.
It is worth noting, checks lost up to 80% of their value by June 2021, almost a quarter remaining out of its recorded value. Moreover, some banks had to exchange some checks from their own funds in order to exchange them to cash dollars from the parallel market on the lookout to fulfill their commitment of depositing 3 percent of their total dollar deposits with external correspondent banks.
Value of Cleared Checks by Currency, by June (in $B)
