Tag: FinancialEducation

Money and Inflation

We often hear the term ‘inflation’ to describe a general increase in prices, this rise is typically caused by one of two factors. First, it can occur due to a change in the purchasing power of what the money symbolizes, often triggered by a deliberate reduction in the quantity of wealth it represents. This is the essence of monetary manipulation. Second, prices may rise due to a fall in purchasing power without any change in the quantity of the money itself. For instance, if gold becomes naturally cheaper because of a new supply, an Islamic Dinar made of 4.25 grams of gold will naturally buy less.

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Towards Understanding Riba (Part II)

Clarity on issue of Riba is so important in Shari’ah that while recognizing change in value due to change in quality, it does not force us to exchange different qualities in equal quantity and yet in case of Amwale Ribuwiah, it does not allow these to be directly exchanged with any excess of weight (quantity) on either side. As generally understood by our scholars, this restriction was essential to stop practice of Riba by hiding behind difference in quality.

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