Question
I would like to know about investment in currency (FOREX Market). Like nowadays, it’s very common that people invest in Euros to earn profits. One broker keeps on calling me to invest USD in Euro. Is trade in currency halal?
Summary of answer
Trading in currencies is halal so long as the exchange takes place in the same sitting as the contract is made. If the deal is in the same type of currency, this is not permissible because it is a type of riba.
- Is trading in currencies halal?
Praise be to Allah.
Is trading in currencies halal?
Dealing in currencies is permissible so long as the exchange takes place in the same sitting as the contract is made. It is permissible to sell Euros for Dollars so long as the exchange takes place in the same sitting as the contract is made. But when the deal is concerning the same type of currency, such as selling one dollar for two dollars, that is not permissible because it is a type of riba.
In that case they should be of equal amounts and the exchange must take place in the same sitting as the contract if the exchange is concerning one type of currency.
The evidence for that is the report narrated by ‘Ubadah ibn al-Samit (may Allah be pleased with him) who said: The Messenger of Allah (peace and blessings of Allah be upon him) said: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, like for like, same for same, hand to hand. If the types are different then sell however you like, so long as it is hand to hand.” (Narrated by Muslim, 1587)
It says in Majmu’ Fatawa Ibn Baz (19/171-174):
“Dealing in currency , buying and selling, is permissible, but that is subject to the condition that the exchange be hand-to-hand if the currencies are different. If a person sells Libyan currency for American or Egyptian or whatever currency hand to hand, there is nothing wrong with that, such as if he buys dollars for Libyan currency hand to hand, exchanging it in one sitting, or he buys Egyptian or English currency etc for the Libyan or whatever currency hand to hand, there is nothing wrong with that. But if there is a delay, then it is not permissible, and if the exchange is not done in the same sitting, it is not permissible, because in that case it is regarded as a kind of riba-based transaction. So the exchange must take place in the same sitting, hand to hand, if the currencies are different. But if they are of the same kind, two conditions must be met: they should be of equal amounts and the exchange should take place in the same sitting, because the Prophet (peace and blessings of Allaah be upon him) said: “Gold for gold, silver for silver…”
The ruling on currency is as mentioned above; if they are different then it is permissible for the amounts exchanged to be different, so long as the exchange takes place in the same sitting. If they are of the same kind, such as dollars for dollars, or dinars for dinars, then the exchange must take place in the same sitting and they should be of the same amount. And Allah is the source of strength.”
For more, please see these answers: 360987 , 310956 and 125758
And Allah knows best.
FAQs
Summary of answer
Is currency trading halal in Islam? ›
Islam emphasises fair trading in all business transactions and discourages dealings that have a negative impact on either party. As we have established, you can exchange currencies and make a profit. This is considered permissible.
What trade is halal in Islam? ›
Commodity Trading: Trading in physical commodities, such as gold, silver, oil, and agricultural products, is generally permissible as long as the transactions are conducted in a spot basis (hand-to-hand) and without excessive uncertainty or speculation.
What does Mufti Menk say about forex trading? ›
forex trading is haram because you are buying and selling something that is a derivative. so you're not actually buying and selling the money.
Is trading options halal? ›
– The option contract must not involve speculation or risk that does not provide useful gain. In summary, options trading can be considered halal if it adheres to Islamic principles of ethical finance and does not involve any elements that are considered haram in Islam.
Is trading gold in forex halal? ›
Gold has been used as a medium of exchange in Islamic societies for centuries, making it a legitimate asset for investment. XAUUSD trading can be considered spot trading, which is deemed halal by some scholars. Shariah-compliant trading practices can be applied to avoid riba and gharar.
Is trading cryptocurrency haram? ›
Trading futures in cryptocurrency is generally considered haram in Islamic finance. This is due to its speculative nature, likened to gambling, and the involvement of uncertainty and risk, which contradict Islamic principles emphasizing risk-sharing and avoiding speculation.
Is forex trading halal Hanafi? ›
In essence, forex trading is considered halal within certain guidelines, including: No Interest-Based Transactions: Forex trading must avoid any involvement in interest-based transactions. This includes refraining from charging or paying interest on positions held overnight.
What type of money is halal? ›
What is halal investment? Halal is an Arabic term meaning “permitted” and stipulating that: Transactions cannot involve “riba” (interest). Investments must not be made in “haram” (unlawful) assets or commodities such as pork products, alcohol or military equipment, among others.
Which platform is halal for trading? ›
Musaffa: Halal Stock & ETF screening and investing app.
Is Forex essentially gambling? Yes. With every trade placed, a trader is a attempting to predict moves to get profits. Statistically speaking the higher the risk reward ratio, the higher the chance of the trade turning into a losing trade.
What does Allah say about trading? ›
The Quran states in aya 2:275 that "Allah has permitted trade and forbidden usury." But not all trade is allowed in Islam. The Qur'an prohibits gambling (maisir, games of chance involving money).
Is trading Forex same as gambling? ›
Forex trading vs. gambling: Forex trading may appear similar to gambling, but there are key differences. While gambling relies on chance and randomness, forex traders can use strategies and tools to tilt the odds in their favour. Importance of self-control: Successful forex trading requires discipline and self-control.
Is cryptocurrency halal? ›
Is cryptocurrency halal? For many Islamic scholars, the answer quite simply is yes. Shariah principles can be applied to modern crypto analysis and digital currencies as they are based on social justice, accountability and ethics which transcend all forms of financial transactions.
Can Muslims do stock trading? ›
Buying stocks is not haram in general. As long as the company's shares are per Shariah principles, Muslims can invest in that stock. When you are a stock owner, you own a small percentage of the business. However, it is essential that you need to make sure the company in question is aligned with Shariah rules.
Is investing in Apple halal? ›
Yes, Apple shares can be considered Halal.In conformity to Sharia law, ownership shares is considered Halal in the event that the company does not engage in any activities such as gambling, lending or producing alcohol pork, tobacco p*rnography, alcohol, or tobacco.
Is it haram to use currency? ›
Summary of answer. Trading in currencies is halal so long as the exchange takes place in the same sitting as the contract is made.
Which company is halal for trading? ›
List of Halal Stocks in India by Market Capitalization
| Company Name | Ticker | Shariah-Compliance Status |
|---|
| Hindustan Zinc Ltd | HINDZINC.NS | Halal |
| Pidilite Industries Ltd | PIDILITIND.NS | Halal |
| Britannia Industries Ltd | BRITANNIA.NS | Halal |
| Godrej Consumer Products Ltd | GODREJCP.NS | Halal |
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