Forex In The Eyes Of Shariah: A Qualitative Analysis In The Malaysian Context

Abstract

The purpose of this study is to expoundthe fundamentals leading to a verdict on the permissibility of foreign exchange trading, commonly known as forex. This study will encompass Quranic verses, Hadith, Islamic legal maxims (qawaid fiqhiyyah), and contemporary views of the ulema (Islamic scholars). The scope of this research will be focused on a Malaysian context. Primary data gathered from a questionnaire administered to 100 Malaysian respondents will be presented. The findings indicate that most Malaysian respondents are aware of Forex trading but have never attempted it. This is primarily due to a lack of well-informed knowledge about Forex, scepticism, and extreme doubt. They feel more secure not being involved in this trading, which is strongly related to their prejudices. Therefore, the implications of Forex trading will be examined in three spheres of influence: economic, social, and national perspectives. Finally, recommendations for respective parties, such as governments, regulatory bodies, and the public, will be mentioned to address the public's lack of awareness about Forex from a shariah perspective. The research concludes that riba (usury) is unacceptable in any circumstance, and if Forex incorporates this forbidden element, this financial transaction may remain haram (forbidden) indefinitely unless it adheres to Islamic principles and guidelines.