The Ruling on Buying and Selling World Currencies via Margin

Question:
May Allah reward you. This questioner asks and says: Honorable Shaykh, what is the ruling in the Shari'ah, in your view, regarding buying and selling world currencies via margin? That is, you buy the currency with the amount you have, and the bank increases the amount for you tenfold. When there is a profit, the bank takes its full right. As for when there is a loss, the bank has the right to stop the transaction at the point where the loss equals the basic amount you entered with. What is the ruling on that?

Answer:
Buying and selling currencies is a matter of currency exchange (sarf), and currency exchange is not permissible except with two conditions. The first condition, if the currencies are of the same type, is that there are two requirements: the first is equality in amount, and the second is mutual exchange in the meeting place. As for when the currencies differ, one condition is required, which is mutual exchange in the meeting place, and it is permissible to have a difference in amount. The Messenger (peace and blessings be upon him) said: . Selling via screen or telephone is not permissible in currency exchange, because the funds are absent and not present, and there is no mutual exchange in the meeting place.