The market value of Lebanese bank checks dropped to about 12 cents per dollar, falling from 17 cents at the end of the previous year.
The secondary market for Lebanese bank checks, which emerged at the start of the financial crisis due to the widening gap between cash dollars and digital bank accounts, has seen its valuation slide by 29.4%. Depositors locked out of traditional cash access have long relied on selling their trapped funds at a discount to buyers who could use them for debt settlement or banking transactions.
Central Bank Policy Shift Halts Check Purchases
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The decline stems from two main factors, beginning with a shift in policy by Banque du Liban.
With that channel closed, digital funds, or “lollars,” have accumulated in accounts, and the central bank’s rate no longer pulls market prices upward.
Shrinking Loan Portfolios Drive Down Check Prices
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The second pressure on check prices comes from a dramatic contraction in the country’s bank loan portfolio. Borrowers previously used discounted checks to pay off old loans at face value, wiping out major liabilities for a fraction of the cost in cash.
Non-performing loans accounted for 86.4% of the remaining portfolio by May 2026, leaving a very small pool of debt eligible for settlement through old bank checks.
Banks Introduce Alternative Products as Check Utility Dries Up
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With traditional check utility drying up, some financial institutions have introduced alternative products to shed liabilities. While this allows banks and the central bank to clear balance sheet obligations, analysts note that depositors absorb the losses, hoping future property appreciation might offset the discount.
Ultimately, the market that once helped borrowers clear old debts and offered depositors a costly route to liquidity has reached saturation. Sellers now face fewer buyers and lower prices for their trapped deposits.
