Do you know how the MUI fatwa on Forex Trading is currently in effect in Indonesia? Basically Forex trading is legal because the object or instrument being traded is clear. Because the form is clear, transactions between the two parties can be legitimate.
However, this applies if the transaction entered into the SPOT type. SPOT type of Forex trading has very clear rules, namely the transaction is paid in cash. Both parties must meet in one place and make a mutual agreement and it is legal.
When viewed from the way it works, every Forex transaction is carried out with a clear form. Of course we also have to know that there are regulations that apply in Islamic law. The MUI fatwa on Forex Trading does not allow transactions that smell like usury in it.
With these conditions, Trading must be free of interest in every transaction. The transaction can be called legal according to the MUI Fatwa. In the rules of the Jakarta Futures Exchange (JFX) and the Indonesian Futures Clearing House (KBI), Forex provisions have also been explained there.
A Brief Explanation of the MUI Fatwa on Forex Trading
General provisions regarding the sale and purchase of currencies have been determined by the national Sharia board in an official letter number 28/DSN-MUI/III/2002. In these provisions there are 5 important points that you should know about Forex Trading and its current license.
Not for Speculation (chance)
The condition that must be met for a transaction to be allowed is that it does not contain elements of Maysir or luck in it. Based on the MUI fatwa on Forex Trading, Maysir contains fraud in which one party gains and loses.
So Maysir can be defined as gambling because it benefits one and harms the other. In Islam, this is not allowed because the law is shirk. Therefore, if you feel Forex trading is a gamble, then you should avoid it.
There is a Reserve Fund Balance
Savings are important, because you can keep your money from running out completely. In gambling, money is usually used up because it is in the form of bets. However, in the MUI fatwa on Forex Trading, activities that involve gambling elements are prohibited.
One of them is spending money in one transaction because of the gambling element. Therefore, try not to spend money when trading Forex. Set aside funds for savings so as not to fall into the act of gambling.
Same Exchange Rate
The third condition that you must know is that transactions must use the same exchange rate. The MUI fatwa on Forex Trading explains that usury is a forbidden act. The exchange rate must be the same so that the transaction can be declared valid and in accordance with Islamic law.
Of course this is already established in Forex Trading where the exchange rate is always the same. If there is a difference, then the broker you are using is in trouble. Try to look for other brokers who have met the conditions according to the MUI Fatwa.
Use the Current Exchange Rate
When transacting with different exchange rates, you must use one of the exchange rates by mutual agreement. This will help you to reach a deal when trading. Forex basically uses the same exchange rate or rates.
This is in accordance with the MUI fatwa on Forex Trading so that its implementation is legal. You can continue trading Forex if you already know the applicable conditions. But still, be careful when transacting by looking at the rules there.
Understand the Science
The last thing is to understand the science of trading well so that the data analysis is there. If you are trading Forex without knowing the knowledge, then it is the same as gambling. For no particular reason, you make a transaction and expect to profit from the change in value.
Try before starting Forex trading, you first learn how to analyze the data. If you understand how to analyze it, you will know the direction of the next chart movement. This will help you to avoid gambling that is prohibited.
By understanding the four points above, you can already trade Forex. MUI basically does not prohibit us from conducting foreign exchange transactions. However, according to the MUI fatwa on Forex Trading, deviant actions can be called gambling and that is prohibited in Islam.
Trading terms and conditions in Islam
To be clear, the following trading conditions are allowed in Islam.
1. Transactions are urfy
Urfy in forex trading can be interpreted as being open so that the exchange rate of the currency traded must be known by both parties, both the seller and the buyer. This provision was narrated by Imam Bukhari in Sahih Bukhari, Kitab Al-Buyu ‘which reads, “Trade gold for silver and silver for gold as you wish.”
2. Paid cash fairly
Trading is allowed on the condition that justice is served. The point is that all transactions must be paid commensurate or of the same value, in cash or cash, so that the exchange rate is equal so that it does not harm either party in the future if there is a change in value.
3. Exchange is not the same
Similar to what is stated in the hadith narrated by Muslim, scholar Ibn Mundhir argues that the trading business is the same as barter (exchange) activity in Islam which is called sharf. In a sharf, buying and selling currency in forex trading is known as taqabudh fi’li or equalizing the value of currency with purchases that are not of the same type.
4. Meet the 3 elements of trading
The element of trading in Islam is similar to the element of buying and selling, namely having sellers and buyers who transact with each other (aqid), there are transaction goods with an exchange rate and time period (maqud ilaih), and make consent or agreement and transaction agreements (sighat aqad).
Thus, the sale and purchase of foreign currency is still considered valid even though it is carried out indirectly. Of course as a trader there is no loss at all and there is no cheating. Why is that? Because everything is transparent or can be monitored directly.
The exception is if the money from forex trading is not given to the owner so that it can be said to be illegal or fraudulent. You also don’t have to worry because every player can find out all the forecasts or price movements of each type of foreign currency.