Question Summary:
Exchanging Currencies

Question Detail:

This is what I do:
1) For example: Dollar ($) rate in Pakistan today is 100RS. Someone want to deposit $100 in his liberty reserve account or want to purchase $100 of liberty reserve, he contact me to buy and I have a local exchanger of liberty reserve. which sell me 1 Dollar($) per 103RS ($ today is 100RS but he selling in 103RS by making 3RS his profit, by considering all of his fees and taxes as he deposit by some exchanger to his liberty reserve account). Now, I purchase $100 in 103 RS rate and sell to another party $100 in 106RS rate, by making 3RS profit per Dollar($). Now, tell me is it profit permissible for me? Both parties seller and buyer know the current rates of today of Dollar($).
2) For Example: Dollar($) rate is 100RS in Pakistan constant to 1 week. So, someone local exchanger selling me 1$ in 95RS rate of Liberty Reserve(he have a large stock or he earns highly income from net so that's why he selling in 95RS). So, I bought $100 daily till 1 week and selling in the rate of 99RS by making 4RS per Dollar($) profit.
Is this permissible for me?

Answer :

In the Name of Allah, the Most Gracious, the Most Merciful.
As-salāmu ‘alaykum wa-rahmatullāhi wa-barakātuh.


In principle, if one currency is exchanged with a currency of another country on spot (immediately), then the exchange rate may be mutually agreed upon by both parties. In other words, the parties are not bound to confine themselves to the current market rate (spot rate).
However, if the exchange is deferred from either side, then the parties are bound to exchange in accordance with the spot rate.
Hence, in your case, if the payments are made immediately from both sides without deferral from either side, the parties are at free will to stipulate any rate they agree upon and the excess earned is permissible.[1]
And Allah Ta’āla Knows Best
Abdul Azīm bin Abdur Rahman,
Student Darul Iftaa
U.S.A.
Checked and Approved by,
Mufti Ebrahim Desai.