RESOLUTION NO. 42(4/5)
CONCERNING CURRENCY RATE FLUCTUATION

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, holding its Fifth Session, in Kuwait City (State of Kuwait), from 1 st to 6 th Jummada al-Oula 1409 H (10 to 15 December 1988);

Having reviewed the research papers presented by the members and experts on “Currency rates fluctuation” and after having listened to the discussions held on this issue;

Having taken cognizance of resolution No. 2(9/3) adopted by the Council of the Academy at its 3 rd session, in which it was agreed that Bank notes, being legal currencies, possess all characteristics of valuables, are in general governed by Shari’a provisions applied to gold and silver, and namely rules relating to Riba (usury), Zakat and Salam (sale by advance payment);

RESOLVES

It is significant that a fixed debt is repaid in its own currency and not by its counter value, because debts are settled in the same currency.  Thus it is not permitted to attach fixed debts, whatever their source, to currency fluctuation.

Verily, Allah is All-Knowing - Unquote

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