Forex trading is 'haram', says Malaysia's Fatwa Council

Malaysia's National Fatwa Council has ruled that foreign exchange trading is forbidden or 'haram' for Muslims as it was against the Islamic Sharia law.

"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 participate in such trading," Council chairman Dr Abdul Shukor Husin was quoted as saying by the Star newspaper.

He said Muslims should not participate in forex trading as there were many doubts about it, given that it involved individuals using the Internet with uncertain outcomes.

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

Husin said the meeting also decided that it was permissible for Muslims to invest or save under the Premium Saving Certificate scheme by a local bank here.

He said the committee was satisfied with the briefing given by the country's central banks Shariah panel regarding the scheme’s implementation.

Husin added that the committee also agreed to formulate guidelines on Muslim couples having their wedding ceremony in a mosque to allay doubts that the ceremony purportedly follows Christian practices, the report said.