• +27 11 413 2785/6

Online Forex Trading


I would like to find out if dealing in this type of online forex trading is permissible?


Shari’ah has placed certain restrictions on currency trading to avoid interest-based transactions. Exchanging different currencies is permissible even with excess on one side as long as one party takes possession of his currency at the time of the transaction. However, when trading with deferment from one party, the market value on the day of trading should be considered. Deferment from both parties will render the transaction impermissible. 

In Forex trading, only the value of the currency being traded with is transferred to the buying party; i.e. actual and physical transfer of funds and monetary notes does not occur. In essence, the buyer and seller become indebted to each other of the value of each other’s respective currencies.

No physical transfer of monetary notes into each other’s banking accounts takes place. The transaction thus involves a debt from the part of both the buyer and seller. Such a transaction is unanimously forbidden in Shari’ah. It comes in a narration that Ibn Umar Radhiallahu anhu has said:

نهى رسول الله – صلى الله عليه وسلم – عن بيع الكالئ بالكالئ ‌وهو ‌بيع ‌الدين بالدين

Nabi Sallallahu alaihi wasallam has prohibited a transaction which involves a debt in exchange of a debt.” (Musannaf Abdur Razzaaq, Vol.8, pg.90)

It is a condition for at least one party (either the buyer or the seller) to take physical possession of one of the currencies if the currencies are not gold and/or silver. When one understands how this specific area of forex trading works, one will realize that this fundamental condition is not upheld when doing currency/forex trading over the internet.

Checked and Approved By:

Mufti Muhammed Saeed Motara Saheb D.B.



Related Fatawa
Fixed Return Policy

Question I would like to know if the following investment is halaal and if not, what should be done with Read more

Distribution Of A Pension Fund Payout During A Persons Lifetime

Question I am working for a company what has a provident fund. Need to know what percentage to distribute to Read more

Share Trading

Question I wanted to know if the buying and selling of shares is permissible, but for that companies that primary Read more

Pension Scheme

Question I work for the local council, and have been enrolled onto the Local Government Pension Scheme. I have tried Read more

ETF and Option Trading

Question Is it permissible to invest in ETF?Is it permissible to do option trading? Answer ETF (exchange-traded fund) is a Read more

Darul Ifta - Darul Uloom Azaadville - Madrasah Arabia Islamia