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Nowadays, many people try to find shortcuts to earn money.

One such "shortcut" is to carry foreign currency from one country to another and profit by selling the foreign currency. Some people around me do this kind of earning, but I am not sure if it's legal to earn money in this way.

Is this type of earning correct/wrong in Islam?

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According to a well-known hadith of the prophet, it is permissible to sell silver for gold, or vice-versa, as long as it is done hand-to-hand. This can easily be extended by analogy to selling any one form of currency for another.

As long as there is no fraud (e.g. passing off foreign currency as a more valuable local currency) or delay involved, I know no reason to forbid such transactions.

  • there is one aspect of this question that also needs to be answered: Since almost all currencies in the world are tacked against a single currency (the US Dollar), in a way, this kind of arbitrage trading would result in someone somewhere within the trading chain incurring a loss. – Najeeb Jan 6 '14 at 13:55

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