ECONOMY

One in every 10 checks is bouncing

one-in-every-10-checks-is-bouncing

Bounced checks represent at least one in 10 following the introduction of capital controls as the liquidity drought is hurting businesses and entrepreneurs due to the drops in consumption and corporate turnover.

The 10 percent rate for checks that can’t be processed is three or four times greater that the national average recorded in the first half of the year, as it ranged between 2.5 and 3 percent up to June 28, when the government imposed the capital controls.

The bounce rate had soared to 27 percent in the first few days of the bank holiday, and it has now stabilized at 10 percent, according to data collected in the first week of August. However, given that most checks are dated for the end of each month, it is likely there will be a surge in the bounce rate come the end of August.

The Economy Ministry’s decision to extend the grace period for checks by one month will ease the pressure on issuers for covering them in time.