(Taken from: Fatāwā ʿUlamāʾ-e-Ḥadīth, Kitāb al-Ṣalāh, vol. 1)
✿ Question:
Zayd purchases Saudi Riyals or other foreign currencies on credit from different people, paying more than the market rate in Pakistani Rupees. He receives these currencies at the time of the sale, while the agreed-upon amount in Pakistani Rupees is paid at a fixed future date. Is this practice permissible?
✿ Answer:
✔ This type of transaction is known as “Bayʿ al-Salam” (Forward Sale)
Its essence is that a person purchases a commodity (or currency) on credit and pays the agreed price at the stipulated time.
✔ Key Principles in Foreign Currency Exchange:
Foreign currency is also a commodity in trade. It can be bought on credit for any price (more or less than the market rate), provided that the following two Sharʿī conditions are strictly met:
➊ Determination of Price:
The price must be clearly defined and agreed upon at the time of the contract.
➋ Determination of Payment Time:
A fixed date for payment must be clearly specified.
✔ In the context of the question:
If both of these conditions are fulfilled—the price and the payment time are both predetermined—then this transaction is permissible.
✔ Supporting Evidence:
This practice is supported by the action of the Prophet ﷺ. When he passed away, his armor was pledged with a Jew in exchange for some barley, and the payment for this barley was due later.
(Reference: Aḥādīth Nabawiyyah, Incident of the Pledge)
✿ Conclusion:
✔ This establishes the permissibility of Bayʿ al-Salam as long as the Sharʿī conditions are strictly followed.
And Allah ﷻ knows best.
✿ Question:
Zayd purchases Saudi Riyals or other foreign currencies on credit from different people, paying more than the market rate in Pakistani Rupees. He receives these currencies at the time of the sale, while the agreed-upon amount in Pakistani Rupees is paid at a fixed future date. Is this practice permissible?
✿ Answer:
✔ This type of transaction is known as “Bayʿ al-Salam” (Forward Sale)
Its essence is that a person purchases a commodity (or currency) on credit and pays the agreed price at the stipulated time.
✔ Key Principles in Foreign Currency Exchange:
Foreign currency is also a commodity in trade. It can be bought on credit for any price (more or less than the market rate), provided that the following two Sharʿī conditions are strictly met:
➊ Determination of Price:
The price must be clearly defined and agreed upon at the time of the contract.
➋ Determination of Payment Time:
A fixed date for payment must be clearly specified.
✔ In the context of the question:
If both of these conditions are fulfilled—the price and the payment time are both predetermined—then this transaction is permissible.
✔ Supporting Evidence:
This practice is supported by the action of the Prophet ﷺ. When he passed away, his armor was pledged with a Jew in exchange for some barley, and the payment for this barley was due later.
(Reference: Aḥādīth Nabawiyyah, Incident of the Pledge)
✿ Conclusion:
✔ This establishes the permissibility of Bayʿ al-Salam as long as the Sharʿī conditions are strictly followed.
And Allah ﷻ knows best.
