Bank Negara, Fatwa clarifies issues on forex trading

Bank Negara Malaysia clarified that only licensed banks can buy and sell of foreign currency in Malaysia.

These incude commercial banks, Islamic banks, investment banks and international Islamic banks as provided for under the Exchange Control Act 1953.

Such trading is also allowed with licensed money services business providers or money changers as provided for under the Money Services Business Act 2011.

In addition, Shariah-compliant financial products, including foreign exchange related transactions, offered and transacted by licensed Islamic financial institutions are approved by the Shariah Committee of the respective financial institutions with endorsement from the Shariah Advisory Council of Bank Negara Malaysia, it said in a statement Thursday.

On the other hand, National Fatwa Council chairman, Tan Sri Dr Abdul Shukor Husin, said the ban on forex trading among Muslims is in reference to the ban on forex trading scheme by individual spot forex via electronic platform which is against the law.

He said the disallowance is not applicable to forex trading through licensed money changers and financial institutions.

"I find that my statement was wrongly reported by some media organisations that said that all foreign exchange trading is forbidden," he said.

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Tags: foreign currency, Fatwa, forex trading, Shariah, Muslim ban, bank licenses, Bank Negara Malaysia