IslamQA

Currency Exchange

Answered according to Hanafi Fiqh by DaruliftaaZambia.com

Question

Asslamulaikum if we buy dollar and fix the rate and pay kwacha after 7 hours is permissible?

Answer

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

In principle, if two different currencies are traded with one party trading on credit, then the currency will be traded on the market rate of exchange. Both parties cannot mutually agree on the exchange rate. In this instance, any amount over and above the market rate will be regarded as interest. For example, if Kwacha are exchanged for Dollars, the Kwacha will be paid after 7 hours on the current market rate of K18 to the Dollar.

A two sided credit transaction of currencies is not permissible. It is necessary for one party to take possession of his currency at the time of the transaction.

You may refer to the following link for more details on exchanging currencies.

http://daruliftaazambia.com/fatwa/?id=95

 

And Allah Ta’āla Knows Best

 

Mufti Muhammad I.V Patel

Checked and Approved by
Mufti Nabeel Valli

Darul Iftaa Mahmudiyyah


Lusaka, Zambia

This answer was collected from Daruliftaazambia.com, which serves as a gateway to Darul Iftaa Mahmudiyyah – Lusaka, Zambia.

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