What is the ruling in the religion regarding exchanging paper currency of one country for paper currency of another country with an increase? I will give you an example: one thousand Algerian dinars are equal to
Machine translationRead the Arabic original
The questioner : What is the ruling in the religion regarding exchanging paper currency of one country for paper currency of another country with an increase? I will give you an example: one thousand Algerian dinars are equal to about one thousand and one hundred French francs at the bank. It is said that many citizens, some of them, exchange one thousand dinars for three thousand French francs. Is this considered riba or not? I ask for a comprehensive explanation, and may you remain well?
The Shaykh : Praise be to Allah. It is well known that the dealing in these paper currencies has occurred recently due to their lightness, the ease of transporting them, the ease of counting them, and other known characteristics of these paper currencies. The scholars have differed on what to classify them as: whether to classify them as gold, silver, or goods. The position that is stronger in my view is that they are classified as currency, but they are classified as currency of different types.
The questioner : Yes.
The Shaykh : This means that we treat them, when they differ, as the difference between gold and silver. For example, regarding what the questioner mentioned, we say that French paper currency is not the same as Moroccan, Algerian, or Tunisian paper currency, or the like. We treat this difference as the difference between gold and silver. We say that if currency of this type is sold for currency of that type, it is necessary for the exchange to take place in the meeting of the contract, meaning before the two parties separate; it must be hand to hand.
The questioner : Yes.
The Shaykh : However, there is no harm in the difference in amount. So if the value of this currency is estimated at one thousand, one thousand and one hundred, and he sells it, meaning at the bank.
The questioner : Yes.
The Shaykh : And he sells it, or people trade it among themselves for one thousand and two hundred, or one thousand and three hundred, or one thousand and five hundred, or three thousand as the questioner mentioned, then there is no harm in it. This is because we see that what is prohibited among these paper currencies is only riba al-nasi'ah (usury of deferment).
The questioner : Yes.
The Shaykh : As for riba al-fadl (usury of excess), it is not prohibited. This is because it is not itself the specific metal in which equality is required; rather, it is subject to and capable of increase and decrease according to supply and demand. So the increase and decrease in it is not harmful because it is subject to supply and demand. But what is prohibited is separating before the exchange is completed.
The questioner : Now, this brings up another issue that is widely circulated among people these days.
The Shaykh : Praise be to Allah. It is well known that the dealing in these paper currencies has occurred recently due to their lightness, the ease of transporting them, the ease of counting them, and other known characteristics of these paper currencies. The scholars have differed on what to classify them as: whether to classify them as gold, silver, or goods. The position that is stronger in my view is that they are classified as currency, but they are classified as currency of different types.
The questioner : Yes.
The Shaykh : This means that we treat them, when they differ, as the difference between gold and silver. For example, regarding what the questioner mentioned, we say that French paper currency is not the same as Moroccan, Algerian, or Tunisian paper currency, or the like. We treat this difference as the difference between gold and silver. We say that if currency of this type is sold for currency of that type, it is necessary for the exchange to take place in the meeting of the contract, meaning before the two parties separate; it must be hand to hand.
The questioner : Yes.
The Shaykh : However, there is no harm in the difference in amount. So if the value of this currency is estimated at one thousand, one thousand and one hundred, and he sells it, meaning at the bank.
The questioner : Yes.
The Shaykh : And he sells it, or people trade it among themselves for one thousand and two hundred, or one thousand and three hundred, or one thousand and five hundred, or three thousand as the questioner mentioned, then there is no harm in it. This is because we see that what is prohibited among these paper currencies is only riba al-nasi'ah (usury of deferment).
The questioner : Yes.
The Shaykh : As for riba al-fadl (usury of excess), it is not prohibited. This is because it is not itself the specific metal in which equality is required; rather, it is subject to and capable of increase and decrease according to supply and demand. So the increase and decrease in it is not harmful because it is subject to supply and demand. But what is prohibited is separating before the exchange is completed.
The questioner : Now, this brings up another issue that is widely circulated among people these days.