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 264,443 checks by June 2023 to 106,853 checks by June 2024. However, the cumulative value of cleared checks in local currency increased from LBP 29,514B by June 2023 to LBP 38,780B by June 2024. This upsurge in value of Lebanese checks still reflect a larger percentage of discounting Lebanese checks in the market. However, the cumulative value of cleared checks in foreign currency dropped from $2,173M by June 2023 to $780M by June 2024.
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed substantial yearly drop of 51.23% and 84.29% respectively to settle at 96,342 and 10,511 checks, by June 2024. Accordingly, the dollarization rate of checks in terms of volume fell from 25.3% in June 2023 to 9.84% in June 2024.
Notably, the number of returned checks dropped substantially by 74.86% YOY to stand at 583 checks. Moreover, the value of returned checks in foreign currency decreased by 83.47% by June 2024 to reach $23.47M; additionally, the value of returned checks in local currency decreased by 61.36% YOY to reach LBP 187B in June 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 June 2024, the cumulative number of checks issued from fresh accounts reached 11,048, of which 7,419 checks are in USD currency amounting $101.4M and 3,629 checks are in LBP currency amounting LBP 5,893B.
On a monthly basis, a total number of 2,259 fresh checks were issued in June 2024, below the previous month’s figure of 2,557.
Cleared Checks by June 2024 (in 000s)
Disclaimer :
This article is a research document that is owned and published by Blominvest Bank SAL.
No material from this publication may be modified, copied, reproduced, repackaged, republished, circulated, transmitted or redistributed directly or indirectly, in whole or in any part, without the prior written authorization of Blominvest Bank SAL.
The information and opinions contained in this document have been compiled from or arrived at in good faith from sources deemed reliable. Neither Blominvest Bank SAL, nor any of its subsidiaries or affiliates or parent company will make any representation or warranty to the accuracy or completeness of the information contained herein.
Neither the information nor any opinion expressed in this research article constitutes an offer or a recommendation to buy or sell any assets or securities, or to provide investment advice.
This research article is prepared for general circulation and is circulated for general information only.