A questioner asks, saying: Is it permissible for one of us, for example, to go to one of the currency exchange companies that does not deal in riba (usury or interest), give them, for example, one hundred dirhams, on the condition that they give him a check in Egyptian pounds?
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The questioner : A questioner asks, saying: Is it permissible for one of us, for example, to go to one of the currency exchange companies that does not deal in riba (usury or interest), give them, for example, one hundred dirhams, on the condition that they give him a check in Egyptian pounds? And is it required that the sale be hand-to-hand, as stated in the hadith? Knowing that currency exchange in Cairo will only be through an interest-based institution?
The Shaykh : There is no doubt, I think, among us all that these paper currencies do not have intrinsic value. A white sheet of paper, in terms of intrinsic value, is better than paper currency, because a person can benefit from that white sheet by writing something on it. The value of these paper currencies is nominal, based on the gold allocated to them by each country according to what it has set aside for its currency. Therefore, we must keep this fact in mind when we buy one paper currency with another like it. We are not buying something with value for something else with value in one respect, and then that neither of the two currencies is from the ribawi (interest-bearing) items. In reality, we are buying gold with gold. So the answer to the question is that this should be hand-to-hand first, for the reason I mentioned earlier that this currency does not have intrinsic value, but its value is based on the gold allocated to it. And it is not permissible to trade in these currencies except within the limits of the necessary exchange that a person must have, for the reason I mentioned that these currencies do not have intrinsic value, but their value is nominal. Then, because of what we see every day of the rise and fall of some paper currencies, especially if their source is some weak countries, dealing in these paper currencies becomes almost like gambling. For this reason, I see that the answer to the previous question is that this transfer is not permissible, because it should be hand-to-hand, considering that the basis is gold. Indeed, it is not permissible to expand the exchange process for the reason I mentioned earlier.
The Shaykh : There is no doubt, I think, among us all that these paper currencies do not have intrinsic value. A white sheet of paper, in terms of intrinsic value, is better than paper currency, because a person can benefit from that white sheet by writing something on it. The value of these paper currencies is nominal, based on the gold allocated to them by each country according to what it has set aside for its currency. Therefore, we must keep this fact in mind when we buy one paper currency with another like it. We are not buying something with value for something else with value in one respect, and then that neither of the two currencies is from the ribawi (interest-bearing) items. In reality, we are buying gold with gold. So the answer to the question is that this should be hand-to-hand first, for the reason I mentioned earlier that this currency does not have intrinsic value, but its value is based on the gold allocated to it. And it is not permissible to trade in these currencies except within the limits of the necessary exchange that a person must have, for the reason I mentioned that these currencies do not have intrinsic value, but their value is nominal. Then, because of what we see every day of the rise and fall of some paper currencies, especially if their source is some weak countries, dealing in these paper currencies becomes almost like gambling. For this reason, I see that the answer to the previous question is that this transfer is not permissible, because it should be hand-to-hand, considering that the basis is gold. Indeed, it is not permissible to expand the exchange process for the reason I mentioned earlier.