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 298,043 checks by July 2023 to 123,460 checks by July 2024. However, the cumulative value of cleared checks in local currency increased from LBP 36,174B by July 2023 to LBP 47,579B by July 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 $2,402M by July 2023 to $868M by July 2024. This is clearly a good indication of how cash-based the economy has become, not withstanding the use of credit cards in Lebanese pounds and US dollar
Moreover, the volumes of cleared checks in Lebanese Pounds and foreign currencies witnessed substantial yearly drop of 50.38% and 83.88% respectively to settle at 111,709 and 11,751 checks, by July 2024. Accordingly, the dollarization rate of checks in terms of volume fell from 24.46% in July 2023 to 9.52% in July 2024.
Notably, the number of returned checks dropped substantially by 72.63% YOY to stand at 693 checks. Moreover, the value of returned checks in foreign currency decreased by 81.44% by July 2024 to reach $27.47M; additionally, the value of returned checks in local currency decreased by 58.5% YOY to reach LBP 210B in July 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 July 2024, the cumulative number of checks issued from fresh accounts reached 14,534, of which 9,833 checks are in USD currency amounting $133.6M and 4,701 checks are in LBP currency amounting LBP 7,846B.
On a monthly basis, a total number of 3,486 fresh checks were issued in July 2024, more than the previous month’s figure of 2,259.
Cleared Checks by July 2024 (in 000s)
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