RESOLUTION NO. 102(5/11)
ON CURRENCY TRADING

Compiled By:
Prof. Dr. Mohd. Ma’sum Billah
masum2001@yahoo.com
masum@applied-islamicfinance.com
+6019-3699542

Quote-The Council of the Islamic Fiqh Academy, emanating from the Organization of the Islamic Conference, in its 11 th session held in Manama, Bahrain, on 25-30 Rajab 1419H (14-19 November 1998),

Having examined the research papers presented to the Academy in connection with the issue of “Currency Trading” and having listened to the discussions which took place about this subject,

RESOLVES

First:  Confirming the Academy’s Resolution No. ( 21/9/3) in respect of banknotes and the change in the value of currency, Resolution no. (63/1/7) in respect of stock exchanges, paragraph (three): trading in commodities, currencies and indexes of organized markets, Resolution on trading in currencies and Resolution no. 53(4/6) in respect of receipt of money, paragraph(Two): (1-c).

Second: It is not permissible in Shari’a to sell currencies by deferred sale, and it is not permissible, still, to fix a date for exchanging them.  This is evidenced in Qur’an, Sunnah and Ijma’ (the consensus of the Muslim Ummah).

Third: Riba (usury), trading in currencies, and exchange of currencies that do not comply with the principles of Islamic Shari’a are among the most important reasons for the financial crises and economic fluctuations which have gripped some countries.

RECOMMENDATIONS

The Islamic Fiqh Academy, makes the following recommendation:

·       It is incumbent upon Muslim governments to exercise control over money markets and oblige them to regulate their activities, which are carried out in currencies and other transactions, in accordance with the principles of Islamic Shari’a, because these principles are the safety valve against economic disaster.

May Allah’s prayers and blessings be upon our Prophet, and upon his family and Companions - Unquote

(Source: "Resolution and Recommendations of the Council of the Islamic Fiqh Academy (1985-2000)” , IRTI.)