Inflation versus interest : inflation vs interest rate

Fatawa Question

Asalamualykum Warhmatullahi Wabarakatu. In a country where inflation is growing very fast compared to the economic growth rate of a nation (depressing the purchasing value of money from time to time), what would be a verdict on interest rate ? No doubt, in a country where inflation is growing at an average of 15 % the value of money is still depreciating if it is deposited in a bank at an annual interest rate of say 10 %. Is it possible to speak of usury in such circumstances ? How is the whole issue of interest rate seen in a country where there are no Islam banks ? Will you please shed a light on these ?

Fatwa

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Publication Date

2007-07-25

Main Subjects

Economics & Business Administration
Islamic Studies

No. of Pages

1

Data Type

Fatawa

Language

English

Record ID

BIM-784672

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