Is exchanging currencies (200 dollars for 100 euros at an exchange rate of 1 euro = 2 dollars), with an agreement to reverse the transaction at the same rate after a specified period, even if the exchange rate changes, permissible or forbidden?
This transaction is Islamically prohibited and invalid, as it involves "two sales in one sale," which is forbidden. Furthermore, it is a currency exchange (sarf) contract where the condition of immediate possession (taqabud) is absent, which invalidates the contract. Additionally, the condition of a second contract alongside the currency exchange contract nullifies the transaction, as in the case of selling an item for gold dinars while stipulating that the price be paid in dirhams at an exchange rate agreed upon in the same contract. As for Forex, merely raising the banner of an "Islamic account" does not permit its transactions unless the company adheres to guidelines.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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- Original fatwa ID
- 170700
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- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy