Fatwa: # 45738
Category: Jurisprudence and Rulings...
Date: 21st September 2020


Masaa'il regarding Currency exchange



I have some Pakistani Rupees in Pakistan and some of my family members and friends needed to send money to Pakistan from US so they asked me if I transfer Rupees in pakistan and they will give me equivalent US dollars here. 

Due to economic instability and COVID, the conversion rate for US dollar and Pakistani Rupees is constantly declining and fluctuating as well. 

I am currently using current conversion market rate for these transactions.  So doing this I am bearing loss compared to before COVID conversion rate. 

People who are asking me for these transactions are saving money because when you send money using applications like western union or xoom, the conversion rate is less than the market value and also there is international transfer fee. So they are saving money on it.  


Q. I want to know if I can set my own conversation rate. For example, if it is $1 = Rs. 167 now due to economy crisis and before COVID it was around $1 = Rs. 155. Can I set a lower conversion rate? Would that be considered interest?


Q. I want to know if I can charge a fee like maybe $10 per transaction? Or would that be considered an interest?





In the Name of Allah, the Most Gracious, the Most Merciful.

As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.

Currency exchange may be divided in the following categories:

1.      When neither of the two parties take possession of the money at the time of the transaction i.e. a two sided credit transaction. For example, A says he will give the money in one week and B says he will give the money in two weeks.

This is not permissible.

2.      When both parties take possession of the money at the time of the transaction.

This will be permissible and they may exchange the currencies on any mutually agreed rate.

3.      When only one party takes possession of the money.

This will be permissible. However, the currency may only be exchanged at the market rate. It should be noted that the market rate can vary between the buying and selling price (of the banks). Therefore, the market rate will not be specific to one amount, rather one may exchange the currency at any of the rates given by the bank.

The inquired scenario will fall under the third category. Therefore, it will not be permissible to set your own conversion rate. The currency will have to be exchanged according to the market rate (in between the buying and selling rate of the banks).

In regards to charging a fee for the transaction, it will not be permissible unless it includes real costs such as the costs of delivering the money etc.

And Allah Ta’āla Knows Best


Student - Darul Iftaa

Checked and Approved by,
Mufti Ebrahim Desai.


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