According to the data published by the Association of Lebanese Banks’ (ABL), the total number of cleared checks in the Lebanese financial system increased from 93,120 checks by February 2023 to 475,868 checks by February 2024. Moreover, the cumulative value of cleared checks in local currency increased remarkably from LBP 9,240B by February 2023 to LBP 77,798B by February 2024. 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. Similarly, the cumulative value of cleared checks in foreign currency rose from $1,071M by February 2023 to $3,730M by February 2024.
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed significant yearly rises of 469.4% and 268.42% respectively to settle at 376,217 and 99,651 checks, by February 2024. Accordingly, the dollarization rate of checks in terms of volume fell from 29.05% in February 2023 to 20.94% in February 2024.
Notably, the number of returned checks rose substantially by 428% YOY to stand at 3,607 checks. Moreover, the value of returned checks in foreign currency increased by 857% by February 2024 to reach $201M; additionally, the value of returned checks in local currency increased by 415.31% YOY to reach LBP 1,010B in February 2024.
Banque du Liban (BDL) recently issued Circular 165, which permits depositors to make payments by check starting 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, in February 2024, the cumulative number of checks issued from fresh accounts reached 2,627, of which 1,847 checks are in USD currency amounting $19.41M and 780 checks are in LBP currency amounting LBP 1,311B.
On a monthly basis, a total number of 1,382 fresh checks were issued in February 2024, surpassing the previous month’s figure of 1245; notably the total number of fresh checks in 2024 exceeds the cumulative number of fresh checks issued from July till December 2023, which stood at 2,395. As such, there is a growing demand for fresh checks among businesses.
Number of Checks by February 2024 (in Thousands)
Source: ABL, BLOMINVEST
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