Is this considered usury if Muhammad absolves Khalid from the remaining riyal that was a debt, and does this fall under the Prophet's saying (peace be upon him): "There is no harm if you part ways and there is nothing between you"?

What transpired between Muhammad and Khalid could take two forms:

1. A permissible form: If the exchange is based on nine riyals, with the tenth riyal remaining as a trust. This is permissible and not usury (riba).

2. A forbidden form: If the exchange is based on ten riyals, with nine present and one deferred. This is not permissible due to the failure to meet the condition of immediate possession (al-taqabud).

However, if Muhammad purely gifted the extra riyal to Khalid, then the exchange was based only on the nine riyals, and this does not fall under usury (riba).