Foreign Exchange Trading - An Islamic perspective

General consensus is that foreign exchange markets trading is permissible under Islamic law where the trading is of one currency for another. However, there is some debate whether forward trading on foreign exchange markets is prohibited under the Riba prohibition rules of Islamic law. Some of the differences in opinions are because of the varying interpretation of Fiqh by the various schools of thoughts.

However, despite such differences, foreign exchange (forex) trading has been exercised by numerous Muslims in the Middle East for many years. For most, investing in the foreign exchange markets has been the best source of investment, especially when stock trading has not been very easy until recently for people living in the Middle East.

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