National Shari'a Board - Indonesian Council of Ulama Fatwa No. 28 of 2002 on Sale and Purchase of Currency (Al-Sharf)

This fatwa states that the sale and purchase of currency, in principle, is permissible, provided the following conditions are met:

  1. no speculation is involved;
  2. there is a transactional need, or a need to protect one's finances;
  3. if a transaction is made with regards to the same currency, the value thereof must be the same and in cash (at-taqabudh); and
  4. if a transaction is made using another currency, the current exchange rate must be applied and in cash.

The fatwa permits spot transactions, but prohibits forward, swap, and option transactions.

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