According to the data published by the Association of Lebanese Banks’ (ABL), the total number of cleared checks in the Lebanese financial system slumped from 469,569 checks by February 2021 to 356,777 checks by February 2022. However, the value of total cleared checks increased yearly by 11.54% to reach $5.51B for the second month of 2022.
In details, the value of checks in LBP almost doubled on year-on-year (YOY) to reach $3.52B, while value of checks in foreign currencies decreased by 29.86% YOY to reach $1.98B by February 2022. Arguably, the increase in the value of LBP checks could be attributed to their greater use to clear transactions given the dearth of LBP currency caused by BDL’s deliberate policy of reducing currency in circulation so as to shore the LBP exchange rate against the USD.
The volumes of cleared checks denominated in Lebanese Pounds and foreign currencies witnessed significant yearly drops of 16.77% and 30.04% to settle at 177,309 and 179,468 checks, respectively by February 2022.
Accordingly, the dollarization of cleared checks in terms of value went down from last year’s 57.35% to 36.06% by February 2022. In same token, the dollarization rate of checks in terms of volume declined from last year’s 54.63% to 50.30% by February 2022.
Notably, the number of returned checks fell by a substantial 39.94% YOY to 2,776 checks while the value of the returned checks retreated by 23.23% YOY over the same period to reach $50M by February 2022. Noting that banker checks are more often used to conduct check payment transactions, therefore the number of returned checks have considerably declined.
Value of Cleared Checks by Currency, by February (in $B)
Source: ABL, BLOMINVEST