Forex trading 'haram', says National Fatwa Council

KOTA BARU: The National Fatwa Council ruled Wednesday that foreign exchange trading (forex trading) is forbidden (haram) for Muslims.

Council chairman Tan Sri Dr Abdul Shukor Husin said forex trading was against Islamic law and created confusion among Muslims.

"A study by the committee found that such trading involves currency speculation, which contradicts Islamic law.

"For that reason, the National Fatwa Council has decided that it is haram for Muslims to be engaged in such trading," he told reporters after chairing the Council's 98th conference here Wednesday.

Abdul Shukor said Muslims should not engage in forex trading as there are many doubts about it and it involves individuals using the Internet, with uncertain outcomes.

"Other forms of trading in foreign currencies, such as by money changers or between banks, are permissible, as they do not involve currency speculation or uncertain outcomes," he said.

He said the meeting also ruled that it was permissible for Muslims to invest or save in the Premium Saving Certificate scheme managed by Bank Simpanan Nasional (BSN).

He said the decision was reached after the committee was satisfied with the briefing by the Bank Negara syariah panel on the scheme's implementation.

"At first we had doubts about the scheme's implementation, but we were satisfied after the trading system was changed into the Islamic concept of Mudharabah," he said. - Bernama