Allah's Messenger (ﷺ) said, "Do not sell gold for gold unless equivalent in weight, and do not sell less amount for greater amount or vice versa; and do not sell silver for silver unless equivalent in weight, and do not sell less amount for greater amount or vice versa and do not sell gold or silver that is not present at the moment of exchange for gold or silver that is present.
The Prohibition of Riba in Sales
This hadith from Sahih al-Bukhari establishes the fundamental Islamic prohibition against riba (usury/interest) in monetary transactions, specifically addressing the exchange of gold and silver, which were the primary currencies during the Prophet's time.
Conditions for Currency Exchange
The hadith outlines three essential conditions for the lawful exchange of gold for gold or silver for silver: they must be equal in weight, exchanged hand-to-hand (simultaneously), and of the same type.
This ruling prevents the hidden riba that occurs when there is disparity in quantity or delay in delivery, which constitutes usurious gain.
Scholarly Interpretation
Classical scholars like Imam Nawawi explain that this prohibition extends to all currencies that serve as monetary standards. The requirement for equal weight and immediate exchange ensures fairness and prevents exploitation.
The wisdom behind this ruling is to maintain economic justice, prevent wealth concentration through unfair means, and purify transactions from elements of uncertainty and deception.
Contemporary Application
In modern times, this ruling applies to currency exchange transactions where different currencies are traded. Scholars have derived from this hadith the principles governing foreign exchange, requiring spot transactions and avoiding forward contracts that involve riba.
The prohibition serves as a foundation for Islamic finance, ensuring that all monetary exchanges are conducted with transparency, fairness, and immediate settlement.