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Online forex trading is haram, decrees Perlis mufti

Dr Mohd Asri Zainul Abidin says there are un-Islamic elements of usury and gambling in online forex trading platforms.

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GEORGE TOWN: The Perlis mufti’s office has issued a fatwa decreeing online forex trading as haram.

“Online trading of forex for profit should be stopped immediately.

“We (fatwa committee) have found forex platforms, local or overseas, to be haram,” said Perlis mufti Dr Mohd Asri Zainul Abidin today.

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Asri said, generally, foreign exchange involving cash was allowed as it was a one-to-one exchange and was transacted immediately.

However online forex speculation and trading was haram for several reasons.

The foremost reason was the lack of actual cash being passed on through “hakiki or hukmi”, he said.

He said there was also evidence of riba (usury, or the illegal practice of lending money at unreasonably high rates of interest), leveraged through facilities such as cash loans offered by forex platforms.

“There is also an element of maisir (gambling) by exposing traders to profit or loss based on speculations on forex outside of the control, effort and influence of people doing business,” he said.

“There is also evidence of gharar (uncertainty) for the owners of the platform, and a lack of laws to monitor such trade and legitimacy of the transaction,” Asri said.

It is learnt the fatwa will be tabled at the next sitting of the state assembly.

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