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﴿ فَاسْأَلُوا أَهْلَ الذِّكْرِ إِن كُنتُمْ لَا تَعْلَمُونَ ﴾

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Ruling on repaying a loan with an increase due to a change in the value of currency

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Question: My brother in Allah (Hassan) lent me two thousand Tunisian dinars, and we wrote a contract for it, in which we stated the value of the amount in German currency. After the loan period, which was one year, had passed, the value of the German currency rose, so that if I pay him what is in the contract, I would be giving him three hundred Tunisian dinars more than what I borrowed. Is it permissible for the lender to take the increase, or is it considered riba? Especially since he prefers to be repaid in German currency so that he can buy a car from Germany.

Answer: The lender is entitled to nothing but the amount he lent you, which is two thousand Tunisian dinars, unless you permit the increase, in which case there is no harm; based on the saying of the Prophet (peace and blessings be upon him):
for the best person is he who discharges his debt in the best mannerإن خيار الناس أحسنهم قضاء
Sunan Abi Dawud 3346Sahih (Al-Albani)
narrated by Muslim in his Sahih, and al-Bukhari reported it with the wording:
for the best amongst the people is he who repays his debts in the most handsome mannerإن من خيار الناس أحسنهم قضاء
Sahih al-Bukhari 2392
. As for the contract mentioned, it is not to be acted upon, and nothing is binding by it; because it is a non-Shari'ah contract, and the Shari'ah texts indicate that it is not permissible to sell currency for currency except at the rate of equivalence at the time of exchange, and that the two parties should not separate while anything remains between them.
Source binbaz.org.sa

The Arabic text is copied verbatim from the original source, without any edits.

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