Friday, February 17, 2012

Forex Trading Haram

Forex Trading Haram is not a shocking news to everyone who trade Forex in Malaysia. They're many rumours about government want to stop Forex trading before. On 15 February 2012, The National Fatwa Council ruled that foreign exchange trading (forex trading) is forbidden (haram) for Muslims. Bernama News reported, Council chairman Tan Sri Dr Abdul Shukor Husin said forex trading is against Islamic law and creates confusion among Muslims. 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. A study by the committee found that such trading involves currency speculation, which contradicts Islamic law.

Malaysia Forex

NST reported, International Shariah Research Academy for Islamic Finance (ISRA) head of Research Affairs, Dr Asyraf Wadji Dusuki when contacted, said he lauded the National Fatwa Council's decision as it is targeted at Muslim individuals who engage in forex trading via the Internet. He said ISRA research on online forex trading raised a few concerns such as the leverage, rollover interest, the issues of qabd and qabl (status of ownership), and the element of gambling. Asyraf said it is common from brokers to offer a loan in the form of leverage, which is against Islamic practice. This practice can lead to riba (interest), whereby the broker will profit through what is known as spread - the differences between the bid and ask prices where the broker sells the currency to the trader at a high price and buying it at a low price.

Bank Negara Malaysia only allowed buying and selling of foreign currency in Malaysia to licensed commercial banks, Islamic banks, investment banks and international Islamic banks as provided for under the Exchange Control Act 1953. Such trading is also allowed with licensed money services business providers (money changers) as provided for under the Money Services Business Act 2011. In addition, Shariah-compliant financial products, including foreign exchange related transactions, offered and transacted by licensed Islamic financial institutions are approved by the Shariah Committee of the respective financial institutions with endorsement from the Shariah Advisory Council of Bank Negara Malaysia, Bank Negara said in a statement.

On 17 February 2012, The National Fatwa Council has clarified that its ruling on foreign exchange trading (forex trading) actually refers to illegal spot forex schemes run by individuals through electronic platforms. The ruling does not involve forex through licensed money exchanges and licensed commercial banks. Dr Abdul Shukor warned that Muslims should not participate in spot forex trading through electronic platforms due to doubts over the scheme as it involved individuals using the Internet with uncertain outcomes and was illegal.

Trading Forex by individual is Haram but trading by Banks is Halal?
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