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 2,745,805 checks in October 2021 to 1,399,559 checks by October 2022. Consequently, the value of total cleared checks decreased yearly by 4.62% to reach $29.40B by October 2022.
In more details, the value of checks in LBP increased remarkably from $15.07B in October 2021 to reach $20.45B by October 2022 indicating the massive behavior for depositors to cash out their Lebanese deposits at discount in the market thus leading to higher values for checks in LBP. Meanwhile, the value of checks in foreign currencies decreased significantly by 43.22% year on year (YOY) to reach $8.94B by October 2022.
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed significant yearly drops of 42.15% and 55.22% respectively to settle at 757,002 and 642,557 checks, by October 2022.
Accordingly, the dollarization of cleared checks in terms of value declined from 51.09% in October 2021 to 30.42% by October 2022. In the same token, the dollarization rate of checks in terms of volume fell from 52.26% in October 2021 to 45.91% in October 2022.
For the most part, the number of returned checks fell substantially by 56.70% YOY to stand at 9,693 checks while the value of returned checks retreated by 41.51% YOY to reach $272M by October 2022. This downtrend for returned checks is mainly driven by the issuing of banker checks that are being used as a payment, and crucially they are being less rejected for insufficient funds.
Value of Cleared Checks by Currency, by October (in $B)
Source: ABL, BLOMINVEST