I live in the uk. I used my indian credit card to buy car insurance in the UK for 68 pounds. The exchange rate at which the credit card company was Rs 79 for 1pound(which is Rs 5372). They charged me in indian rupees. I am paying them the full amount before they charge me interest on the balance. I am sending money to india and paying them back now in indian rupees the same amount they initially charged me indian rupees. However, the currency now they currency rate is Rs 77.50 for a pound. Hence, I have to send more pounds(69.31 pounds) then what I was charged to cover the amount. Is the extra amount that I have to send(in pounds) to cover the cost considered as interest? Please note I am paying them the same Rs. 5372 that they charged me.
In the name of Allah, Most Gracious, Most Merciful
Assalaamu `alaykum waRahmatullahi Wabarakatuh
You were charged in Indian rupees and you are paying back in the same amount in Indian rupees. There is no interest involved in the repayment. The issue of you purchasing rupees with pounds and the fluctuation in the exchange rate is a different issue.
And Allah knows best
Mufti Ebrahim Desai
Darul Iftaa, Madrassah In’aamiyyah