CONCERNING CURRENCY ISSUES
Quote-The Council of the Islamic Fiqh Academy, holding its
eight session, in Bandar Seri Begawan, Brunei Darussalam, from 1 to
7 Muharram,1414H (21-27 June 1993).
the research papers received by the Academy as the
subject Currency issues.
Having listened to
the debates on the subject.
- First: Work statues, rules and regulations, and
employment contracts may include definition of remuneration in
currency figures provided these are duly indexed, with the provided
that the Indexation should not be prejudicial to the national
economy. Indexation in this context means periodical
adjustment of salaries in line with the progression of the cost of
living as may be assessed by the relevant and expert authority.
Such adjustment aims at protecting the workers currency payments
wages against any decrease in the purchasing power that the wages
afford due to currency inflation and any consequent increase in the
general cost of commodities and services.
For indeed the
governing principle with regard to conditions of contracts is that
they are permissible, excepting those that authorize something
prohibited (Haram) so prohibit something authorized (Halal).
In case of overdue
salaries, the aggregate debt thus accumulated becomes subject to the
provisions applicable to debts as stipulated in, the
Academys Resolution No. 42/4/5.
Second: The creditor and debtor may agree on the day of settlement
but not before - to the settlement of the debt in a currency other
than the one specified for the debt, provided the rate of exchange
applied is that applicable on the settlement date. Similarly,
for debts due in installments in a specific currency, the parties
may agree on the day of settlement of any installment, to have it
effected, in full, in a different currency at the prevailing rate
exchange on the date f settlement. A conditional requirement
in all cases is that no part of the amount subject of the currency
exchange should remain outstanding, with due consideration to the
Academys Resolution No. 50/1/6.
Third: The two parties to the contract may, at the time of
contacting, agree to the settlement of the deferred cost or salary
in a specific currency to be settled in single payment or in several
well defined installments in a variety of currencies or
against a given amount of gold, the settlement may also be made as
indicated in the item above.
Fourth: A debt contracted in a specific currency should not be
recorded against the debtor in its counter value in gold or other
currencies because such a practice would make it compulsory to the
debtor to settle the debt in gold or the other currency, as agreed
upon for the settlement.
Fifth: To reiterate Resolution No. 42/4/5 issued by the
Academy concerning fluctuation in currency value.
THE COUNCILS RECOMMENDS THAT:
The General Secretariat of the Academy shall assign to a number of
competent Sharia and economics researchers known for their
attachment to Islamic thought, to undertake an in-depth study of the
other currency related issues, to be submitted for
consideration at future sessions of the Academy, God willing.
Such issues may include;
possibility of using a hypothetical currency such as the Islamic
Diner, and particularly as regards the Islamic Development Banks
transactions, for the extension and redemption of loans, as well as
for the determination of term-loans to be settled at the equationary
rate between the hypothetical currency in question and the foreign
currency in which the settlement is to be effected, such as US
Sharia ways for indexing deferred remunerations to the
standard average, level of prices.
concept of stagnation of currency notes and its effect on defining
deferred rights and dues.
thresholds at which currency notes are considered as
Allah, though, knows best-unquote
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