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 190,418 checks by April 2023 to 75,294 checks by April 2024. However, the cumulative value of cleared checks in local currency increased from LBP 17,963B by April 2023 to LBP 23,624B by April 2024. This upsurge in value of Lebanese checks reflects a larger percentage of discounting Lebanese checks in the market. However, the cumulative value of cleared checks in foreign currency dropped from $1,688M by April 2023 to $581M by April 2024.
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed substantial yearly drop of 52.01% and 83.6% respectively to settle at 66,947 and 8,347 checks, by April 2024. Accordingly, the dollarization rate of checks in terms of volume fell from 26.73% in April 2023 to 11.09% in April 2024.
Notably, the number of returned checks dropped substantially by 73.94% YOY to stand at 426 checks. Moreover, the value of returned checks in foreign currency decreased by 64.71% by April 2024 to reach $20.47M; additionally, the value of returned checks in local currency decreased by 52.35% YOY to reach LBP 172B in April 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 April 2024, the cumulative number of checks issued from fresh accounts reached 6,232, of which 4,209 checks are in USD currency amounting $59.89M and 2,023 checks are in LBP currency amounting LBP 3,404B.
On a monthly basis, a total number of 1,915 fresh checks were issued in April 2024, surpassing the previous month’s figure of 1,690; notably the total number of fresh checks in the first four months of 2024 exceeds the cumulative number of fresh checks issued from July till December 2023 (within 6 months), which stood at 2,395. As such, there is a growing demand for fresh checks among businesses.
Cleared Checks by April 2024 (in 000s)
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