Can You Pay off a Loan in a Different Currency?
Question❓
I borrowed some money in dollars from a friend, and I paid him back in Saudi riyals in installments based on the rate of exchange at that time (the time of the loan). What is the ruling on that?
Summary of answer
Loans should be repaid in the same currency as they were taken by the borrower unless the two parties agree at the time of repayment to repay it in a different currency. There is nothing wrong with that so long as that is done at the rate of exchange on the day of repayment not the rate of exchange that existed on the day when the loan was given.
Question❓
I borrowed some money in dollars from a friend, and I paid him back in Saudi riyals in installments based on the rate of exchange at that time (the time of the loan). What is the ruling on that?
Summary of answer
Loans should be repaid in the same currency as they were taken by the borrower unless the two parties agree at the time of repayment to repay it in a different currency. There is nothing wrong with that so long as that is done at the rate of exchange on the day of repayment not the rate of exchange that existed on the day when the loan was given.