The Ruling on Trading in Currencies

Question:
Our brother Muhammad from Libya also asks and says: Is it permissible to trade in currency for the sake of profit? For example, if I exchange three hundred Libyan dinars, we get one thousand dollars, and the one thousand dollars in Tunisian banks is eight hundred Tunisian dinars, and then I exchange the eight hundred Tunisian dinars for eight hundred Libyan dinars, so we would have made a profit of five hundred Libyan dinars. Is this lawful or forbidden?

Answer:
Buying and selling in currencies is permissible, but with the condition of hand-to-hand exchange, meaning: the mutual possession of the goods. So, if one sells Libyan currency for American or Egyptian or other currency hand-to-hand, there is no harm, such as buying dollars with Libyan currency hand-to-hand... he takes possession and delivers, or he buys Egyptian or English or other currency with Libyan or other currency hand-to-hand. As for a deferred transaction... or without possession, it is not permissible; it is riba. Therefore, mutual possession in the assembly hand-to-hand is necessary, otherwise it becomes riba. Yes.