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The question

What must I repay to the other party to clear my liability, after I borrowed an amount from him in dollars equivalent to 25,0 Egyptian pounds, with an issue in the exchange rate, and an agreement to record the amount as a debt in Egyptian pounds, then his demand for repayment in dollars upon his return?

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Source: FtawySummary from Ftawy's records · added here Sep 2, 20261 min readAlso available in العربية
The answer

The basic principle is that a loan should be repaid with an equivalent amount. However, it is permissible to agree on repayment in a different currency at the exchange rate of the repayment day. The question implies that sending dollars was intended to benefit from exchange rate differences, and that this action was an authorization to convert dollars into pounds and borrow pounds, meaning the loan was in Egyptian pounds. When repaying, it is permissible to give dollars instead of pounds, at the exchange rate of the repayment day, even if the amount is less than the original transfer, based on the of Ibn 'Umar: "There is no harm in taking it at its value on that day, as long as you do not part while there is something between you." It also states in a resolution by the Islamic Fiqh Academy that it is permissible to agree on the day of repayment to settle the debt in a different currency at its exchange rate on the day of repayment. Some scholars believe that if the value of the currency decreases by one-third or more, the value of the currency at the time of the loan should be referenced for repayment, to prevent harm to the lender. It is preferable for both parties to reach an amicable agreement, such as sharing the loss from the currency devaluation, to prevent harm.

Summary from Ftawy's records · added here

Reviewed by El Fatwa's sharia committee.

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Where this answer came from
Source platform
Ftawy
Original fatwa ID
18508
Added here
. This is when the answer was added to El Fatwa, not the fatwa's date.
Text
Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
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Read the full answer on Ftawy