Is trading in currencies permissible?

The questioner : Is trading in currency lawful?

The Shaykh : It is not permissible to trade in currency, and we repeat this always and forever, because trading in currency is today most like gambling. Furthermore, paper currency has no intrinsic value. It used to have a nominal value based on a percentage of gold, but that system was abolished. We witnessed this when we were young; some Syrian currency was printed with the statement that the Syrian pound was equivalent to a specific percentage of gold in the bank. By presenting one hundred Syrian pounds, you would receive, for example, two or three Ottoman gold coins. This was the case before, but now none of this exists. The currency of peoples, especially those who are degraded or backward, is paper—neither silver nor gold. It was supposed that paper currency would have a specific percentage of gold backing it. So when you buy one currency with another, they must be equal in value from the perspective of gold. This does not exist today. Added to this is the decline that paper currencies suffer due to wars and other causes, as is observed, for example, in Lebanon, then in Syria, then in Iraq, then here, and finally in Kuwait. We know many merchants who suffered severe losses because they dealt in this type of trade. I know a person from there, between whom and us there is a kinship, who, when the war between Iraq and Iran ended, saw the situation of the Iraqi dinar improve slightly. He went to the market, ran, and bought thousands of them. But then Iraq won, and the price of the Iraqi dinar rose. What happened? Only days had passed since he bought them, and the Iraqi dinar crashed, so he suffered very severe losses. For these two reasons, it is not permissible to trade in this paper currency. Rather, what is permissible is what a person is compelled to do for exchange for the necessities of life that are unavoidable. As for buying and hoarding, watching the market and the stock exchange, seeing it go up and down, and dealing with this rise and fall—I think we have all come to believe that this entire market is in the hands of the Jews, as they say. Despite this, you find people who do not take heed and go to buy and sell, not realizing that they are gambling. And gambling is the prohibited *maysir* (gambling) by the explicit text of the Qur'an and the authentic Sunnah of the Messenger (peace and blessings be upon him).

The questioner : So, does *riba* (usury or interest) not enter into this matter?

The Shaykh : It is, of course.

The questioner : Fine, a man bought an amount, and it is still with him because he heard a fatwa of permissibility from one of the scholars, but this amount is still with him. So what is your advice?

The Shaykh : My advice is that he should not wait. If the amount is, for example... you are Jordanian, and your life is here, and your dealings are in Jordanian dinars, and the currency you have is, for example, dollars or, for example, riyals, or so on, go directly and exchange them into Jordanian currency. Do not sit watching the market. If you have, for example, dollars that have become cheap, hold onto them? No, exchange them here. You have returned to trade. If the one who is entangled is truly entangled, then he must, as soon as this reality becomes clear to him, exchange what he has, whether he profits or loses, because...

Another questioner : ...for trade, he buys from it based on maintaining a certain level of his goods...

The Shaykh : He cannot buy the goods except with this currency.

Another questioner : Of course, from abroad, of course, import.

The Shaykh : So he does not want to trade in the same currency.

Another questioner : He has to buy...

The Shaykh : It returns to the issue we mentioned earlier. It returns to the issue we mentioned earlier. For example, I want to go for Hajj, and the dinars there do not work, so I exchange them here. What do I exchange them for? Riyals, but only in the amount I need there. So you are the same here: you want to buy goods from there, and they do not want Jordanian currency; they want what? Riyals, for example. So you also exchange them for this purpose. Our previous discussion was about trading in the currency itself. But if you exchange an amount of one currency into another because you cannot buy the trade you need with your local currency, then that is permissible.

Another questioner : I mean holding the currency for a time, the amount for a time, on the basis of maintaining the price level in the market.

The Shaykh : Holding the currency?

Another questioner : I buy currency and hold it on the basis that its value does not drop or rise, on the basis of settling my credit that is in the bank.

The Shaykh : By Allah, it is a problem, my brother. You mentioned the bank; if you had kept it secret, it would have been better.

Another questioner : The settlement is through the bank, Shaykh. Oh Shaykh, what are we supposed to do?

The Shaykh : I understand you.

Another questioner : I am speaking about reality, I mean.

The Shaykh : You are a merchant, yes, reality, and we are speaking about reality. Trading in currency is *riba* (usury or interest) and is not permissible. But exchanging currency to meet a need, whether it is a personal need or a commercial one, is permissible. But hoarding a certain type of currency until it rises and then trading with this currency—this is not permissible.

Another questioner : The issue of currency, oh Shaykh, people are now in great embarrassment and they ask about the alternative. In truth, they tell you, "We may be exposed to a battle now, and the possibility is present." In these circumstances, our dinar cannot withstand the battle. If a smuggler comes out, our dinar reaches a qirsh. This is the reality among people. So what do we do? We obtain, by the grace of Allah, the available alternative. For example, if it is permitted for us to buy gold, provided we maintain what Allah (Blessed and Exalted is He) has commanded regarding the performance of its right. So the one who wants to hold, for example, out of fear of the dinar falling, it is permissible for him to take a lawful exit: he buys gold and holds it, and he performs its right if a lunar year has not passed over it, and it is, of course, according to the *nisab* (the minimum threshold for zakah). But as for the currency, buying a dollar to sell tomorrow, and so on—may Allah reward you with good, as you mentioned.

The Shaykh : Yes, that is it. In truth, it is an exit, but one must also be aware that some people bought the pound or the Rashadi (this Rashadi dinar), buying it, for example, for one hundred dinars or fifty dinars. And if he hears that the pound, which he bought for fifty, has become sixty, he goes down to the market to sell the gold he has. Again, we return to the same problem. If the intention is to preserve the currency as you mentioned, then we have no means except this: we exchange the paper currencies and buy with them gold currency, and we keep it with us, and as I said, we pay its *zakah* (the obligatory alms) every year as Allah and His Messenger (peace and blessings be upon him) commanded. But from the commercial side, this does not suit merchants, you know. Yes, please.

The questioner : I have three questions. The first question.