What is your esteemed opinion regarding the difference in the purchasing power of currency due to its decline or rise?

The questioner : What is your esteemed opinion regarding the difference in the purchasing power of currency? Some people consider it permissible, while others consider it to fall under riba.

The Shaykh : Do you mean the difference due to the rise, fall, and decline?

The questioner : Yes.

The Shaykh : We hold that if this concerns a debt and its repayment, the creditor must repay what is in his liability at the value he received when he received it, whether the value has risen or fallen. This is because, as you know, the matter is based on the saying of Allah the Exalted: . So, this benefactor who lent me a certain number of dinars a few years ago—let us not go too far back—Jordanian dinars. The Jordanian dinar at that time was equal to ten Saudi riyals. Then the Jordanian dinar fell due to political and economic factors; we do not need to go into the details in this area. The value of the Jordanian dinar became half of what it was when I received, for example, one thousand dinars from you. So, based on the previous verse , it is not permissible for me to repay you the same number and count, which is the one thousand dinars I received when the dinar was worth ten riyals and similar stable-value currencies. Rather, I must repay you what is equivalent to that value at that time, meaning instead of one thousand dinars, two thousand dinars. This is not in the least a matter of riba.