Question:
Is it permissible to trade in currency? For example: A man has ‘X’ amount of Saudi Riyal; when it increases in value he sells it. He then waits for it to decrease in value and when it does he buys it. Likewise, (is it permissible) to trade in gold?
Answer:
This matter contains a difference of opinion between the scholars of recent times; the correct of which is that it is permissible to trade in wealth and currency.
He may buy and sell Saudi Riyal whilst the people are not in need of it due to the availability of other sellers. However, if the people are in need of it and he buys, conceals and hoards the currency; the Prophet ﷺ said:
لَا يَحْتَكِرُ إِلَّا خَاطِئٌ
None hoards except the sinner
[Narrated by M’amar ibn Abu Abdu Allah in Muslim: Hadith Number 1605]
He cannot gather, hoard and not release the currency into the market until it rises in value and then release it at an extortionate rate thereafter – whilst the people are in need of it.
However, if it is sold by other than him and available on the market and Allah has enabled him to gain a good exchange rate and he says ‘we will keep this until the value of the currency rises’; this is not haraam for him.
As far as the hadith is concerned:
لَا يَحْتَكِرُ إِلَّا خَاطِئٌ
None hoards except the sinner
It applies to the one who hoards and witholds a commodity the people are in need of until it rises in value; in which case he releases it.
If it is available and in circulation, there is nothing wrong with trading in currency or for him to set aside a portion for it to appreciate in value.
However, this is based upon the condition we have alluded to; if there is no shortage of the currency, nor are the people in need of it.
لَا يَحْتَكِرُ إِلَّا خَاطِئٌ
None hoards except the sinner
Answered by: Shaykh Abu Bilaal Al-Hadhramy – may Allah preserve him
Source: https://t.me/abubilalhami/3169
Answered on: 20th Rajab 1440 (27th March 2019)
Translated by: Abu Sufyaan Saami ibn Daniel Al-Ghaani