The general consensus among Islamic Jurists is that buying and selling of currency is permitted as long as it is done on the spot, and there is no delay of time in exchanging the currencies.

Therefore, forex trading is permissible as long as there is an immediate exchange of cash. Although paper currencies nowadays are not backed by gold or any other precious metals (which is impossible since the total amount of trade globally is more than the amount of gold produced so far), it should be presumed that the currencies in circulation has the same purpose and intent as gold, since it is appreciated by human, albeit artificially.

Syariah law dictates that any exchange gold and silver must be done immediately. Hence, exchanging of currencies in the Forex market should be done immediately, without delay. This is usually the case in the Forex market nowadays.

However, in cases where the handing over of the “commodity” is done within a grace period of two days and not immediately, there is an opinion within the Maliki school of thought which states that a slight delay in transfer of the commodity does not invalidate the sarf (exchange) contract. This is also the view adopted by the Fiqh Academy and Organisation of Islamic Countries (OIC). Therefore, the delay of two days in the case Spot Trading is permissible.