According to the data published by the Association of Lebanese Banks’ (ABL), the total number of cleared checks in the Lebanese financial system decreased remarkably from 159,827 checks by March 2023 to 59,100 checks by March 2024. However, the cumulative value of cleared checks in local currency increased from LBP 14,886B by March 2023 to LBP 17,921B by March 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. Meanwhile, the cumulative value of cleared checks in foreign currency dropped from $1,555M by March 2023 to $516M by March 2024.
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed substantial yearly drops of 55.3% and 83.46% respectively to settle at 51,846 and 7,254 checks, by March 2024. Accordingly, the dollarization rate of checks in terms of volume fell from 27.44% in March 2023 to 12.27% in March 2024.
Notably, the number of returned checks dropped substantially by 74.3% YOY to stand at 329 checks. Moreover, the value of returned checks in foreign currency decreased by 35.1% by March 2024 to reach $19.47M; additionally, the value of returned checks in local currency decreased by 44.14% YOY to reach LBP 162B in March 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 March 2024, the cumulative number of checks issued from fresh accounts reached 4,317, of which 2,965 checks are in USD currency amounting $36.16M and 1,352 checks are in LBP currency amounting LBP 2,125B.
On a monthly basis, a total number of 1,690 fresh checks were issued in March 2024, surpassing the previous month’s figure of 1,382; 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 March 2024 (in Thousands)
Source: ABL, BLOMINVEST
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