Currency exchange, its Illah and implications

Foreign exchange is among the most important transaction in any economy. It can affect positively or negatively the relative price of domestic and foreign goods, which in turn has effect on the country’s economic growth, employment rate, inflation and balance of payment, among others. Yet, foreign e...

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Main Authors:	Oziev, Gapur, Mohammed, Mustafa Omar, Zaidon, Muhammad Hafizi, Amafua, Mahfuth Khamis
Format:	Article
Language:	English
Published:	Institute of Islamic Banking and Finance, International Islamic University Malaysia 2016
Subjects:	BP173.75 Islam and economics
Online Access:	http://irep.iium.edu.my/48829/ http://irep.iium.edu.my/48829/ http://irep.iium.edu.my/48829/1/48829.pdf

id	iium-48829
recordtype	eprints
spelling	iium-488292018-05-24T07:14:50Z http://irep.iium.edu.my/48829/ Currency exchange, its Illah and implications Oziev, Gapur Mohammed, Mustafa Omar Zaidon, Muhammad Hafizi Amafua, Mahfuth Khamis BP173.75 Islam and economics Foreign exchange is among the most important transaction in any economy. It can affect positively or negatively the relative price of domestic and foreign goods, which in turn has effect on the country’s economic growth, employment rate, inflation and balance of payment, among others. Yet, foreign exchange has remained a contentious issue among Muslim jurists and scholars. There are those who approve spot transactions but regard forward transactions as unlawful. Conversely, some scholars and jurists do not see any problem with the forward transactions if they are used for hedging purposes. This contention does bring into fore a pertinent research need of revisiting, in the context of modern business environment, the Illah (effective cause/reason) for determining whether a given foreign exchange transaction is Shari’ah compliant. The present study has critically reviewed the major literature and fatwas issued in relation to foreign exchange. It has adopted content analysis to categorize these various views on the subject and preponderated the major ones relevant to modern business. The authors have concluded that the only possible illah to be considered for the modern paper money is Athummuniyah (means of payment). The study concludes with recommendations and suggestions for future research. Institute of Islamic Banking and Finance, International Islamic University Malaysia 2016 Article PeerReviewed application/pdf en http://irep.iium.edu.my/48829/1/48829.pdf Oziev, Gapur and Mohammed, Mustafa Omar and Zaidon, Muhammad Hafizi and Amafua, Mahfuth Khamis (2016) Currency exchange, its Illah and implications. Journal of Islamic Finance, 5 (1). pp. 45-52. ISSN 2289-2109 E-ISSN 2289-2117 http://journals.iium.edu.my/iiibf-journal/index.php/jif/article/view/99
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	BP173.75 Islam and economics
spellingShingle	BP173.75 Islam and economics Oziev, Gapur Mohammed, Mustafa Omar Zaidon, Muhammad Hafizi Amafua, Mahfuth Khamis Currency exchange, its Illah and implications
description	Foreign exchange is among the most important transaction in any economy. It can affect positively or negatively the relative price of domestic and foreign goods, which in turn has effect on the country’s economic growth, employment rate, inflation and balance of payment, among others. Yet, foreign exchange has remained a contentious issue among Muslim jurists and scholars. There are those who approve spot transactions but regard forward transactions as unlawful. Conversely, some scholars and jurists do not see any problem with the forward transactions if they are used for hedging purposes. This contention does bring into fore a pertinent research need of revisiting, in the context of modern business environment, the Illah (effective cause/reason) for determining whether a given foreign exchange transaction is Shari’ah compliant. The present study has critically reviewed the major literature and fatwas issued in relation to foreign exchange. It has adopted content analysis to categorize these various views on the subject and preponderated the major ones relevant to modern business. The authors have concluded that the only possible illah to be considered for the modern paper money is Athummuniyah (means of payment). The study concludes with recommendations and suggestions for future research.
format	Article
author	Oziev, Gapur Mohammed, Mustafa Omar Zaidon, Muhammad Hafizi Amafua, Mahfuth Khamis
author_facet	Oziev, Gapur Mohammed, Mustafa Omar Zaidon, Muhammad Hafizi Amafua, Mahfuth Khamis
author_sort	Oziev, Gapur
title	Currency exchange, its Illah and implications
title_short	Currency exchange, its Illah and implications
title_full	Currency exchange, its Illah and implications
title_fullStr	Currency exchange, its Illah and implications
title_full_unstemmed	Currency exchange, its Illah and implications
title_sort	currency exchange, its illah and implications
publisher	Institute of Islamic Banking and Finance, International Islamic University Malaysia
publishDate	2016
url	http://irep.iium.edu.my/48829/ http://irep.iium.edu.my/48829/ http://irep.iium.edu.my/48829/1/48829.pdf
first_indexed	2023-09-18T21:09:11Z
last_indexed	2023-09-18T21:09:11Z
_version_	1777411137105559552

Currency exchange, its Illah and implications

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