FOREX IN ISLAMIC PERSPECTIVES DATE OF PRESENTATION: 29 MARCH
2014
ILYAN ANINA BINTI IZANIBG 1111 0201HE 231FOREX IN ISLAMIC
PERSPECTIVES
DATE OF PRESENTATION:29 MARCH 2014
1
CONTENTS2IntroductionLaw and ArgumentsConditions of Bai
Al-SarfThe Issues of Riba ProhibitionIssues of Freedom From
GhararConclusion
INTRODUCTION3
LAW & ARGUMENTS4Gold is to be paid for by gold, silver by
silver, wheat by wheat, barley by barley, dates by dates and salt
by salt like for like, equal for equal, payment being made on the
spot. If the species differ, sell as you wish provided that payment
is made on the spot. (Hadith: Muslim)Regulated under ShariahEasily
manipulated for the purpose of producing an interest-bearing
loan.
CONDITIONS OF BAI AL-SARF5If both of the exchanges are of the
same type or species, then there must be equality in the
amount.
If the exchanged items on both sides are of different species as
in the case of gold being exchanged for silver.
THE ISSUES OF RIBA PROHIBITION6RibaUnlawful gain derived from
quantitative inequality of the counter values.Forward sale in
currencies with fluctuating exchange rates.A spot transaction and a
simultaneous forward transaction.
ISSUES OF FREEDOM FROM GHARAR7Gharar settlement risk.It is
forbidden.Majority of Shariah scholars have disapproved.
Futures and forward in currencies are example of contract.
CONCLUSION8Bai Al-SarfPermissible.immediate possession only spot
trading is allowed.prohibited riba and gharar.
