Prayer TimesCurrency exchange is referred to in Sharia as “saraf”. This means selling cash for cash, whether of the same type or of different types. It is a condition that both parties hand over the money to each other on the spot before parting ways. The exchange is valid for the amount that is handed over immediately (Fath Bab al-Ghinaayah, 2/729).
In the past, exchanges were mainly between gold (dinar) and silver (dirham), but today, currency exchange between different countries is widely practiced.
The Prophet (ﷺ) said: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt—equal for equal, hand to hand. If the types differ, then sell as you wish, provided it is hand to hand.” (Muslim).
Therefore, when exchanging the same type of currency—such as tenge for tenge or dollars for dollars—it is not permitted to take more in return, and the transaction must be completed on the spot in cash. Usually, such exchanges are done to break down or combine denominations.
It is narrated from Abu Minhal (may Allah be pleased with him): “I asked Bara ibn Azib about saraf (currency exchange). He said, ‘Ask Zayd ibn Arqam, he knows better.’ When I asked Zayd, he said, ‘Ask Bara, he knows better.’ Then both said: ‘The Messenger of Allah (ﷺ) forbade selling silver for gold on credit.’ However, if it is hand to hand, there is nothing wrong. But if it is on credit, it is not permitted.” (Bukhari, Muslim). According to the meaning of this hadith, exchanging two different currencies must be done on the spot, and any form of credit is strictly prohibited. Failing to adhere to this leads to riba (usury).
It is narrated from Malik ibn Aws (may Allah be pleased with him): “I wanted to exchange one hundred dinars. Talha ibn Ubaydullah called me over, and we agreed that he would exchange my money. He took the gold and turned it in his hand, saying, ‘My treasurer will come from the forest.’ Umar, who was listening, said: ‘By Allah, do not leave him until you have received your money in full. The Messenger of Allah (ﷺ) said: ‘Exchanging gold for gold is riba. But if it is ‘here, here’ (i.e., immediate exchange), then it is different.’” (Bukhari).
Thus, if the agreement is made but the money is not exchanged on the spot, or if one party receives the money and the other does not before they part ways, the agreement is void. In both cases, the condition of immediate exchange is not fulfilled, and the transaction resembles riba. The main point is that as long as the parties do not separate, the passage of time does not matter. Even if they sleep or travel together, it is valid. But if they part ways before exchanging, the transaction is invalid. One must say “here” and hand over the gold, and the other must also say “here” and hand over the silver before leaving the place.
This ruling was established in Sharia to prevent future disputes. Otherwise, it could open the door to fraud. For example, one party might take the money and say, ‘I will bring the other currency now or tomorrow,’ and immediately start using the money. Or the other party might delay handing over the money. This can lead to conflict, with one side suffering a loss by not receiving their money on time, while the other benefits. The one who loses will demand compensation. If they receive it, it is riba; if not, they will be left with resentment.
Hasan AMANKUL,
“Munara” newspaper, No. 5, 2023
This content was drafted with AI assistance and reviewed by an editor.