EXCHANGE RATE THEORY OF ISLAM

Islamic banking finance economy

by islamicbankingfinanceeconomy.blogspot.com

EXCHANGE RATE THEORY OF ISLAM

The exchange rate of a currency in Islam are also classified into two groups:

1. Natural
2. Human error
In the discussion of exchange rates in accordance with Islam will be used two scenarios, namely:
1. Scenario 1: changes occur in domestic prices that affect the exchange rate (foreign factors are considered not change / affect)
2. Scenario 2: changes in the price of foreign (factor in the country is considered not change / affect)
Apart from that, it is necessary to bear in mind that the exchange rate policy of money in Islam may be said to embrace the system of 'managed floating', where the exchange rate is the result of government policies (not the way or the policy itself) because the government does not mencapuri balance occurs on the market unless the things that upsets the balance itself. So to say that a stable exchange rate is the result of government policy right.