Based on the provided reference from Islam Question & Answer, Forex trading is generally considered not allowed (haram) in Islam.
Why Forex Trading is Not Allowed in Islam
The primary reason mentioned by the Council for the prohibition of Forex trading, according to the reference, is its involvement in riba. Riba is an Islamic concept often translated as usury or interest, which is strictly forbidden in Islam.
Specifically, the reference highlights:
- Involvement of Obvious Riba: The trading process can involve practices that constitute riba.
- Fees for Delaying the Deal: This is described as "paying fees for delaying the deal".
- Nature of Haram Riba: This specific practice of adding to the amount of the loan (or principal value in this context) due to delay is considered a form of forbidden riba (haram riba).
This mechanism, where additional charges are incurred based on time or delay in the transaction's completion or settlement, is viewed as violating Islamic financial principles that require transactions to be free from interest-based elements.
Here is a summary of the core issue based on the reference:
| Aspect | Description Based on Reference | Islamic Ruling |
|---|---|---|
| Core Violation | Involvement of Riba | Forbidden |
| Specific Practice | "Paying fees for delaying the deal" | Haram Riba |
| Resulting Status | Forex trading is not allowed (haram) in Islam | Unlawful |
The prohibition stems directly from the principle of avoiding riba in financial dealings, which is a cornerstone of Islamic finance.
