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 1,480,354 checks by November 2022 to 411,335 checks by November 2023. Moreover, the cumulative value of cleared checks in local currency increased remarkably from LBP 23,461B by November 2022 to LBP 59,878B by November 2023. This upsurge is driven by a significant increase in value of Lebanese checks which reflects a larger percentage of discounting Lebanese checks in the market. Meanwhile, the cumulative value of cleared checks in foreign currency fell from $9,711M by November 2022 to $3,109M by November 2023.
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed significant yearly drops of 60.43% and 86.41% respectively to settle at 320,133 and 91,202 checks, by November 2023. Accordingly, the dollarization rate of checks in terms of volume fell from 45.34% in November 2022 to 22.17% in November 2023.
Notably, the number of returned checks fell substantially by 69.20% YOY to stand at 3,232 checks. Moreover, the value of returned checks in foreign currency increased by 25.71% by November 2023 to reach $176M, additionally the value of returned checks in local currency increased remarkably by 205.86% YOY to reach LBP 783B by November 2023.
Banque du Liban (BDL) recently issued Circular 165, which permits depositors to make payments by check starting from June 1st, 2023, as long as their accounts are in either fresh US dollars or Lebanese lira. To support this initiative, BDL has introduced a new clearing system, distinct from the one dedicated to pre-crisis deposits. This circular serves a dual purpose: it encourages customers to open new accounts in both Lebanese pounds and US dollars, while also aiming to decrease the country’s dependence on cash and stimulate economic recovery. As such, by November 2023, a total number of 1,580 checks were issued from fresh accounts, of which 695 checks are in USD currency amounting $9.80M and 885 checks are in LBP currency amounting LBP 1,762B. However, in November alone, number of checks issued from fresh accounts in dollar stood at 344 checks totaling $4,150,606 while number of checks issued from fresh accounts in LBP reached 275 checks amounting LBP 750B.
Number of Checks by November 2023 (in Thousands)
Source: ABL, BLOMINVEST
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