[Hedging currencies]

Fatawa Question

Dear Dr. Kahf, As-Salam `Alaykum. I have 3 questions : 1. I am working for an export organization. Due to US Dollar weakening against major currencies, is it permissible to hedge the exchange loss on our Dollar receivables by taking forward / option contracts ? 2. If it is not permissible, then how can we hedge our exchange loss ? Please note we cannot factor in a lower exchange rate in our costing since it will make our products uncompetitive in the global market. Please advise ! 3. Is all forms of insurance are prohibited ? Can we take insurance on our stock, business assets (plant, machinery, office) ? Please note that in our country, there is no recourse to Islamic finance. Then, how can we meet our insurance and banking requirements ?

Fatwa

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Publication Date

2008-03-12

Main Subjects

Financial and Accounting Sciences
Islamic Studies

Topics

• Islamic jurisprudence
• Hedge(Finance)

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-732583

• APA
• MLA
• AMA