The Prohibition of Riba in Sales and Trade

This narration from Sahih al-Bukhari 2176 establishes the fundamental Islamic prohibition against riba al-fadl (excess interest) in currency exchange. The Prophet Muhammad (ﷺ) explicitly forbade trading gold for gold or silver for silver unless it is equal in weight and exchanged hand-to-hand.

Scholarly Commentary on Currency Exchange

Classical scholars explain that gold and silver represent the primary monetary standards in Islamic jurisprudence. When these currencies of the same type are exchanged, they must be equal in quantity to prevent any unjust enrichment.

This ruling extends beyond gold and silver to all currencies that serve as monetary standards. The wisdom behind this prohibition is to prevent exploitation and ensure fairness in financial transactions.

Conditions for Valid Currency Exchange

Scholars derived two essential conditions from this hadith: 1) Equality in weight when exchanging identical currencies, and 2) Immediate possession (taqabud) in the same session without delay.

If these conditions are not met, the transaction contains riba, which is strictly forbidden in Islam due to its harmful effects on society and economy.

Application in Modern Context

Contemporary Islamic jurists apply these principles to modern paper currencies, requiring that when exchanging the same currency (e.g., US dollars for US dollars), the amounts must be equal and the exchange immediate.

When exchanging different currencies (e.g., dollars for euros), the amounts may differ based on market rates, but the exchange must still be completed immediately in the same session.