Currency exchange hand to hand
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Currency exchange
Fatwa number ( 3158)
Q1:A Muslim currency exchange dealer buys foreign currency, such as the US dollar, from one of the banks outside the Kingdom in exchange for Saudi riyals,so he agrees with the bank to buy US dollars from it with Saudi riyals. The dealer pays the Saudi riyals on Wednesday, on the condition that the bank pays the dollars on Friday. The payment is made by crediting the amount to the bank's accountin New York,and to the dealer's accountin New York.The price of the dollar is lower than its prevailing value on that day, which is Wednesday. However, if the receipt and delivery take place on the same day, the price of the dollar is the prevailing price on that day. Please inform us, may Allah reward you with good: Is it permissible for the dealer to deal with the bank according to the previous method, which is paying the Saudi riyals on Wednesday and receiving the US dollars on Friday at a price lower than the prevailing price on that day?
A1: If the situation is as you described, where the Saudi riyals are paid on Wednesday and the dollars are to be paid on Friday, this transaction is not permissible because of the riba al-nasi'ah (usury of deferment) involved in it.
Fatwa number ( 3158)
Q1:A Muslim currency exchange dealer buys foreign currency, such as the US dollar, from one of the banks outside the Kingdom in exchange for Saudi riyals,so he agrees with the bank to buy US dollars from it with Saudi riyals. The dealer pays the Saudi riyals on Wednesday, on the condition that the bank pays the dollars on Friday. The payment is made by crediting the amount to the bank's accountin New York,and to the dealer's accountin New York.The price of the dollar is lower than its prevailing value on that day, which is Wednesday. However, if the receipt and delivery take place on the same day, the price of the dollar is the prevailing price on that day. Please inform us, may Allah reward you with good: Is it permissible for the dealer to deal with the bank according to the previous method, which is paying the Saudi riyals on Wednesday and receiving the US dollars on Friday at a price lower than the prevailing price on that day?
A1: If the situation is as you described, where the Saudi riyals are paid on Wednesday and the dollars are to be paid on Friday, this transaction is not permissible because of the riba al-nasi'ah (usury of deferment) involved in it.
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.