Is Selling Purchased Currency at a Higher Price Permissible?
Hanafi Fiqh
Answered by Mawlana Ilyas Patel
Question
If a person buys 1 dollar for a certain price, for example, 100 of any currency, and when that 100 goes to 200, he sells that 1 dollar. Is this type of transaction halal?
Answer
I pray you are in good faith and health. Thank you for your question.
Regarding exchanging currencies from different countries, it is permissible to do so even if there is an excess on one side. For example, exchanging one pound for two dollars is allowed. This is because both currencies belong to different categories, and when exchanging items of different nature, it is allowed to have an excess on one side.
It is permissible to trade currencies of different countries and earn profits from it. However, one party must take possession of their currency at the time of the transaction. As stated in the hadith, it is not permissible to leave both parties in debt.
In normal circumstances, trading in currencies at a rate that is against the rate determined by the government is not permissible, although it cannot be considered an interest (riba).
[Usmani, Buhuth fi Qadhaya Fiqhiyya Mu’asira; Taqi Usmani, Fiqh al-Buyu’]
I would like you to go through the valuable answers and links below. You will receive guidance and direction in sha Allah.
Related
- What is the Ruling on the Exchange of Different Currencies? – SeekersGuidance
- How do you avoid Usury when exchanging currencies? – SeekersGuidance
Why not begin your search for knowledge by signing up for a course on SeekersAcademy (seekers.flywheelstaging.com), like Money Matters (seekers.flywheelstaging.com)?
I pray this helps with your question.
[Mawlana] Ilyas Patel
Checked and Approved by Shaykh Faraz Rabbani
Mawlana Ilyas Patel is a traditionally-trained scholar who has studied within UK, India, Pakistan, Syria, Jordan and Turkey.
He started his early education in UK. He went onto complete hifz of Qur’an in India, then enrolled into an Islamic seminary in UK where he studied the secular and Alimiyyah sciences. He then travelled to Karachi, Pakistan.
He has been an Imam in Rep of Ireland for a number of years. He has taught hifz of the Qur’an, Tajwid, Fiqh and many other Islamic sciences to both children and adults onsite and online extensively in UK and Ireland. He was teaching at a local Islamic seminary for 12 years in the UK where he was a librarian and a teacher of Islamic sciences.
He currently resides in UK with his wife. His personal interest is love of books and gardening.
