Is the loan to be repaid in riyals (the currency disbursed) or in dollars (the currency received), and who bears the conversion fees?

The answer is summarized in the following points:

1. How to Determine the Currency of the Loan: The principle for repaying a loan is to return it in the same way it was borrowed. To determine this, one refers to the loan agreement. First Possibility: If the loan was requested in a specific currency (e.g., Saudi Riyals) and then converted to another currency (e.g., US Dollars) through a verbal or customary authorization (as in the case of international transfers which require currency exchange), then the fixed debt owed by the borrower is in Saudi Riyals. Second Possibility: If the loan was directly requested in a foreign currency (e.g., US Dollars), then the fixed debt owed by the borrower is the US Dollars he actually received, regardless of the exchange rate of the Saudi Riyal.

2. Repaying the Loan in a Different Currency: It is not a condition for repayment that the loan be returned in the same currency. Rather, it is permissible to repay it in any other currency agreed upon by both parties, provided that the repayment is made at the daily exchange rate at the time of debt settlement, and not at the rate of the loan day, and that the exchange takes place in the same sitting.

3. Costs and Provisions for Conversion (Loan Fees): The borrower bears the cost of sending the loan and its fees (both for sending and receiving) because he is the requester and beneficiary. Since the lender is doing a good deed, he should not incur the cost of his act of kindness.