According to the data published by the Association of Lebanese Banks’ (ABL), the total number of cleared checks in the Lebanese financial system slumped from 223,116 checks by January 2021 to 173,378 checks by January 2022. However, the value of total cleared checks increased yearly by 17.16% to reach $2.63B for the first month of 2022.
In details, the value of checks in LBP almost doubled on year-on-year (YOY) to reach $1.64B, while value of checks in foreign currencies decreased by 31.95% YOY to reach $986M by January 2022. Arguably, the increase in the value of LBP checks could be attributed to their greater use to clear transactions given the dearth of LBP currency caused by BDL’s deliberate policy of reducing currency in circulation so as to shore the LBP exchange rate against the USD.
The volumes of cleared checks denominated in Lebanese Pounds and foreign currencies witnessed significant yearly drops of 7.73% and 32.82% to settle at 85,504 and 87,874 checks, respectively by January 2022.
Accordingly, the dollarization of cleared checks in terms of value went down from last year’s 64.43% to 37.42% by January 2022. In same way, the dollarization rate of checks in terms of volume declined from last year’s 58.63% to 50.68% by January 2022.
Notably, the number of returned checks fell by a substantial 37.49% YOY to 1,432 checks while the value of the returned checks retreated by 20.41% YOY over the same period to reach $26M by January 2022. Noting that banker checks are more often used to conduct check payment transactions, therefore the number of returned checks have considerably declined.
Value of Cleared Checks by Currency, by January (in $B)
Source: ABL, BLOMINVEST