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 384,251 checks by October 2023 to 163,970 checks by October 2024. However, the cumulative value of cleared checks in local currency increased from LBP 54,497B by October 2023 to LBP 68,524B by October 2024. This upsurge in value of Lebanese checks given that the number of Lebanese checks issued decreased reflects a larger percentage of discounting Lebanese checks in the market. However, the cumulative value of cleared checks in foreign currency dropped from $ 3,003M by October 2023 to $1,125M by October 2024.
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed substantial yearly drop of 49.51% and 83.88% respectively to settle at 149,878 and 14,092 checks, by October 2024. Accordingly, the dollarization rate of checks in terms of volume fell from 22.74% in October 2023 to 8.59% in October 2024.
Notably, the number of returned checks dropped substantially by 70.34% YOY to stand at 921 checks in October 2024. Moreover, the value of returned checks in local & foreign currency decreased YOY respectively by 18.29% and 64.59% by October 2024 to record LBP 594B and $ 61.97M.
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 October 2024, the cumulative number of checks issued from fresh accounts reached 25,117, of which 17,425 checks are in USD currency amounting $230.05M and 7,692 checks are in LBP currency amounting LBP 14,113B.
On a monthly basis, the number of cleared checks in October 2024 was the highest since the introduction of the new clearing system and reached 3,644 checks.
Cleared Checks by October 2024 (in 000s)
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