Lending and Receiving in Different Currencies
Is it allowed (in terms of Islam) to lend someone in $ currency and request the repayment in another currency like pound sterling, or index its provision with gold?

The differential in borrowing and lending can be calculated according to the changes in value of gold or silver or the rate of inflation. Nowadays gold and silver are not in use as money, and we use them like other commodities. They also gain and lose value in time period. For example, while an ounce of gold (31g.) was $850 in the first months of 1980, its value decreased to $335.5 on 9 March 1982. The loss of value in gold is higher than dollar in these two years. But the volatility of gold in the stock market and the changes in its value occur in short-term. Gold is capable of maintaining its value over the long term.  Depreciation of money could be calculated according to the changes in value of gold and by the way, this could protect us from loss in many cases.

Although using inflation rate is the most appropriate way to calculate the depreciation of money in time period, there are also difficulties in determining the exact inflation rate.

The third way is using foreign currencies which are valid in the market as a basis. They are also banknotes, and therefore are exposed to both inflation and fluctuations parallel to the trends in international stock markets.

Consequently, it would be appropriate to give and receive blessings to each other (both debtor and drawer) after repayment, just in case of any potential or unknown losses, because it is very difficult to fully identify the loss in the value of money in time period.

Facebook'ta PaylaşTwitter'da Paylaş
Date: Feb 12, 2014
Other Fatwas In This Category:
#   Title Date Reads 
1 Trade and Usuary 2009.08.25 551
2 Is the interest from National Savings Certificates Haraam? 2012.04.24 9,539
3 Can we demand the loss caused by delayed payments from the debtors? 2013.04.27 342
4 Should we collect jizyah from our non-muslim neighbours? 2011.09.16 338
5 Is it permitted to get the 0% interest credits? 2012.06.16 629
6 Working in a company that borrows loan on interest 2013.05.19 553
7 USURY IN QURAN AND SUNNAH 2010.07.11 2,823
8 Can we give out the interest profit to the poor? 2012.12.17 889
9 Bonds 2013.05.31 765
11 Borrowing interest-based loans 2012.06.18 479
12 Buying and selling of public property 2013.07.23 648
13 PROHIBITION OF USURY 2010.07.11 777
14 Can I buy a house by using housing loan from a bank? 2012.06.17 711
15 Ruling on Leasing 2014.01.14 650
17 Will it be a sin if we give rushwat for taking our own property which is wrongfully seized? 2013.01.27 433
18 Missed Credit Card Payments 2014.01.20 448
20 Is it lawful to buy gold in installments by using credit card? 2012.07.21 1,398
21 Lending and Receiving in Different Currencies 2014.02.12 456
23 Is it lawful to buy and sell gold over internet? 2013.02.11 391
24 Trading unlawful things 2014.03.05 567
25 Islamic Economics 2010.07.11 463
26 Is it lawful to buy cash by credit card? 2013.02.11 508
27 Buying Foreign Exchange by Credit Card 2014.03.08 497
28 BEY BI’-L-ISTIĞLÂL 2010.07.13 442
29 What is the difference between renting and interest? 2013.02.26 1,325
30 Death of a creditor 2014.04.25 503
31 Relation Between Alms and Market Economy 2011.04.28 397
32 Is it permitted to rent gold? 2013.02.26 418
33 Early Payment Discount and Interest 2014.05.27 691
34 What is the sentence for directing our customers to bank credits(loans)? 2012.01.05 256
35 How to borrow gold from jewelers? 2013.02.28 531
36 Partnership on a fixed profit 2014.11.06 688
37 Amount Of Interest 2011.04.14 580
38 What is the ruling on giving a tender to a predetermined company? 2013.03.11 316
39 Paying off debts by loaning 2015.10.22 536
40 Is it lawful -halal- to use the bonus points paid by banks? 2012.06.11 1,427
41 Is it permitted to rent our real estate property to banks? 2013.03.31 902
42 Is e-commerce legitimate? 2013.01.19 659
43 Stock market 2013.04.06 1,396
44 What is the ruling on life insurance? 2011.08.06 779
45 Were the older communities ordered to give tax (zakat) like we are? 2013.04.12 325