Ruling on paying zakah in a currency different from the one in which it is due
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Q24: The questioner, Y. M. from the Islamic Republic of Iran, Tehran, asks: If I have a friend who resides in a country other than the one I live in, and I need money, is it permissible for me to borrow it in the currency of my country and repay him in the currency of his country? Does the difference in currency affect the payment of zakah, for example, if my share is in dollars and I want to pay my zakah in a currency with a lower value than the dollar, even if it is in the same country? Is this permissible or not?
A24: As for the issue of borrowing a sum of money from a person in one currency and then repaying it in another currency, there is no harm in that; it is permissible to discharge the debt in your possession and pay your creditor or lender in another currency through exchange. This is permissible. However, if there is an increase and this increase is stipulated, then it is not permissible; it becomes a loan that yields benefit, and it is not permissible to take an increase in a loan. But if this increase is a voluntary gift from the borrower, and the lender did not stipulate it, and it is merely a kindness from the borrower as a reward for the favor, then there is no harm in that. The Prophet (peace and blessings be upon him) used to borrow and would give more than he borrowed when repaying, and he said (peace and blessings be upon him): If the difference in currency and the increase come from the voluntary gift of the borrower, and the lender did not stipulate it, then there is no harm in that.
A24: As for the issue of borrowing a sum of money from a person in one currency and then repaying it in another currency, there is no harm in that; it is permissible to discharge the debt in your possession and pay your creditor or lender in another currency through exchange. This is permissible. However, if there is an increase and this increase is stipulated, then it is not permissible; it becomes a loan that yields benefit, and it is not permissible to take an increase in a loan. But if this increase is a voluntary gift from the borrower, and the lender did not stipulate it, and it is merely a kindness from the borrower as a reward for the favor, then there is no harm in that. The Prophet (peace and blessings be upon him) used to borrow and would give more than he borrowed when repaying, and he said (peace and blessings be upon him):
The best of you are those who are best in repaying their debts.
خيركم أحسنكم قضاء
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.