What is the ruling of Islamic law regarding compensating a worker for the loss in value of his overdue financial entitlements due to currency depreciation? Is this compensation considered usury (riba) or a legitimate right owed by the farm owners, and how is the compensation value calculated?
Source: FtawySummarized from the full answer at Ftawy · imported Sep 2, 2026
The basic principle is that debts and established rights of ownership are settled in kind, not in value, as stipulated by the Islamic Fiqh Academy. However, if the currency collapses or its value significantly depreciates, causing a substantial loss to the rightful owner, scholars differ on how to settle the debt. The more prevalent view is to consider the change in the currency's purchasing power or its value in gold. If the parties agree to a reconciliation, there is no objection. Otherwise, the estimation is referred to a judicial authority or arbitration.
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