أثر تغير قيمة العملة الحاد في وفاء الديون

The effect of currency value change upon debt rempayment

Abdulazeem Abozaid

MPRA Paper from University Library of Munich, Germany

Abstract: During wars and domestic disturbances, currencies value tend to fluctuate. This raises the inevitable question of how debts should be repaid; shall the depreciation in the currency value be taken into account so that the debtor shall be required to repay an excess to the debt to compensate the lender for the loss, or that he will have to pay only the exact debt amount because any excess on the principal maount is Riba? This question is evidently relevant to the countries that have witnessed internal revolutions such as Syria and Yemen, where the revolutions have led to a drastic change and a steep decline in the value of their currencies. Some contemporary scholars have showed hesitation and reluctance to give Fiqh opinion on this matter. Fiqh Academy, back in 1988, issued a resolution to the non-consideration of the currency value fluctuations in debt repayment. This resolution was reiterated later by another one issued in 1993. However, both resolutions were issued in the context of currencies that did not undergo the depreciation we have recently experienced. The Iraqi Dinar, for example, lost more than 95% of its value in 2003, and the Syrian Lira has recently lost 90% of its value! This means that if the debt in such a currency is to be paid with no consideration to this drastic change, the creditor will effectively receive only a little fraction of his debt. This, in fact, necessitate revisiting the Ijtihad on this matter in order to realize justice and meet the Shariah objective in achieving fairness in financial deals.

Keywords: currency value; dept repayment; Riba and debt repayment (search for similar items in EconPapers)
JEL-codes: D0 F3 K0 K2 (search for similar items in EconPapers)
Date: 2016, Revised 2016
References: Add references at CitEc
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Published in Al-Tajdid 40.20(2016): pp. 195-215

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https://mpra.ub.uni-muenchen.de/92868/4/MPRA_paper_92526.pdf revised version (application/pdf)

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