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 327,135 checks by August 2023 to 138,241 checks by August 2024. However, the cumulative value of cleared checks in local currency increased from LBP 41,237B by August 2023 to LBP 54,708B by August 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 $ 2,590M by August 2023 to $950M by August 2024.
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed substantial yearly drop of 49.62% and 83.67% respectively to settle at 125,504 and 12,737 checks, by August 2024. Accordingly, the dollarization rate of checks in terms of volume fell from 23.85% in August 2023 to 9.21% in August 2024.
Notably, the number of returned checks dropped substantially by 71.32% YOY to stand at 775 checks. Moreover, the value of returned checks in foreign currency decreased by 75.79% by August 2024 to reach $39.47M; additionally, the value of returned checks in local currency decreased by 21.95% YOY to reach LBP 409B in August 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, by August 2024, the cumulative number of checks issued from fresh accounts reached 17,997, of which 12,277 checks are in USD currency amounting $169.5M and 5,720 checks were in LBP currency amounting LBP 10,422B.
On a monthly basis, a total number of 3,463 fresh checks were issued in August 2024, below the previous month’s figure of 3,486.
Cleared Checks by August 2024 (in 000s)
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