Repayment of Loans: Returning the Original Currency Despite Value Fluctuations
Source: Aḥkām wa Masā’il – Issues of Buying and Selling, Vol. 1, p. 359
A person borrowed one riyal from another at a time when one riyal was equal to ten Pakistani rupees. When he was about to repay the loan, the value of one riyal had increased to fifteen Pakistani rupees.
The question is: Should he return the equivalent of ten rupees, or fifteen rupees? In other words, should repayment be made according to the original currency borrowed, or according to the changed market value?
Al-ḥamdu lillāh, waṣ-ṣalātu was-salāmu ‘alā Rasūlillāh, ammā ba‘d!
According to the fatwās of the scholars:
«يَسْتَدْعِی اتِّقَاءُ الشُّبُهَاتِ ، وَالْاِسْتِبْرَاءُ لِلدِّيْنِ وَالْحُرُمَاتِ أَنْ يُؤَدِّیَ مَا أَخَذَ أَیْ رِيَالاً، وَيَأْمَنَ خَبَالاً وَّوَبَالاً»
“Avoiding doubtful matters and protecting one’s dīn and sanctities requires that he return exactly what he borrowed, i.e., one riyal, thereby saving himself from embarrassment and liability.”
Thus, the correct Shar‘i ruling is:
◈ The borrower must return the same thing that was originally borrowed—in this case, the riyal.
◈ The difference in market value (whether it has increased or decreased) does not make repayment obligatory at a different rate.
◈ The loan is based on the original borrowed item (the riyal), not its value at the time of borrowing.
ھذا ما عندي والله أعلم بالصواب
Source: Aḥkām wa Masā’il – Issues of Buying and Selling, Vol. 1, p. 359
❖ larification of the Question:
A person borrowed one riyal from another at a time when one riyal was equal to ten Pakistani rupees. When he was about to repay the loan, the value of one riyal had increased to fifteen Pakistani rupees.
The question is: Should he return the equivalent of ten rupees, or fifteen rupees? In other words, should repayment be made according to the original currency borrowed, or according to the changed market value?
❖ Answer:
Al-ḥamdu lillāh, waṣ-ṣalātu was-salāmu ‘alā Rasūlillāh, ammā ba‘d!
According to the fatwās of the scholars:
«يَسْتَدْعِی اتِّقَاءُ الشُّبُهَاتِ ، وَالْاِسْتِبْرَاءُ لِلدِّيْنِ وَالْحُرُمَاتِ أَنْ يُؤَدِّیَ مَا أَخَذَ أَیْ رِيَالاً، وَيَأْمَنَ خَبَالاً وَّوَبَالاً»
“Avoiding doubtful matters and protecting one’s dīn and sanctities requires that he return exactly what he borrowed, i.e., one riyal, thereby saving himself from embarrassment and liability.”
Thus, the correct Shar‘i ruling is:
◈ The borrower must return the same thing that was originally borrowed—in this case, the riyal.
◈ The difference in market value (whether it has increased or decreased) does not make repayment obligatory at a different rate.
◈ The loan is based on the original borrowed item (the riyal), not its value at the time of borrowing.
ھذا ما عندي والله أعلم بالصواب
