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What is the ruling on selling one form of currency for another (for example dollars for pounds)? What are the regulations concerning it?

Answered by

Sheikh Râshid Hamad al-`Alawî, professor at al-Imâm University , al-Qasîm Branch
The exchange of currency is a permissible form of business.

The condition for exchanging currencies is for both parties to receive the money by hand. There should be no delay or deferral of payment.

This is based on what the Prophet (peace be upon him) said about the exchange of gold and silver: “Gold for gold, silver for silver, like for like, hand to hand, and whoever increases or ask for increasing he falls in usury” [Sahîh Muslim]

A payable cheque is considered by scholars to be the same as cash. This has been approved by the Islamic Law Council that was convened in Mecca.

And Allah knows best.