Article  Islamic Forex and the Heinous Sin of Riba People who are interested in Forex trading will inevitably come across a term called Islamic Forex trading. If you are not familiar with the Islamic religion then you may wonder what this strange term means. It is a specific type of trading that allows people living in Islamic states to participate in Forex trading in a way that doesn’t violate their religious beliefs or government laws. To understand what this is all about you need to know about the heinous sin called Riba. The Heinous Sins are the equivalent of the 7 Deadly Sins or the Ten Commandments but in a version laid out in the Qu’ran. These sins include everything from murder to Riba. Riba refers to usury (or the charging of interest on a loan). There are many different historical and moral reasons why Riba is considered to be a bad thing and why it is prohibited by the Islamic state. The basic underlying belief here is that interest is a form of oppression by those who have money who should be helping those without money without punishing them for their lack of wealth. The most important thing to know about Riba is that it is explicitly prohibited by the Qu’ran. So how do people who live in Islamic states participate in economic exchanges such as Forex trading? That’s where Islamic Forex comes in. This is a form of Forex that adjusts certain rules in order to accommodate the beliefs and laws of the people who live in Islamic states. This form of Forex trading goes by a variety of names. The accounts that are opened that fall into this category may be called interest-free accounts, swap free Forex accounts or no Riba accounts. All of these types of accounts eliminate overnight interest, which keeps the Forex exchange within the rules set forth for Muslim Forex trading. Different Forex services may have different rules about how exactly a trader can choose one of these accounts. In many cases, the trader must make out an application to use this type of account. However, it is not difficult to use this type of Forex service as long as you choose a company that is familiar with the no Riba accounts that you are interested in using. What is the purpose of these accounts in the market? It serves a two-fold purpose. On the one hand, these accounts allow traders to work with people in Saudi Arabia and other Muslim-based countries despite the fact that these people traditionally cannot participate in normal Forex trading due to the issue of interest. The market is broadened when options are provided for the Muslim people to join in this trading. Perhaps more importantly is the fact that the design and rules surrounding Muslim Forex trading are set up to protect the Muslim traders from problems and abuse by non-Muslim traders. Islamic Forex trading is not all that different from traditional Forex trading. There are simply some accommodations made to allow a wider group of people to participate in Forex trading without compromising their personal beliefs or state laws. Anyone who is familiar with Forex trading will be able to understand the slight change of rules that apply to Muslim Forex trading. It is simply a matter of calculating the exchange without an overnight interest charge attached to it. It may not make sense to everyone why these rules are in place. However, it takes only a brief understanding of the Qu’ran to see why Islamic Forex trading must be a little bit different than traditional Forex trading for the Muslim states to be able to participate in it. After all, you wouldn’t expect anyone to violate the Ten Commandments or to commit a deadly sin while participating in the global market exchange. Likewise, you can’t expect the people living in Islamic states to violate one of the 7 Heinous Sins. The no Riba accounts make it possible for these people to participate in Forex trading without violating their religious laws. Category Finance Author Anonymous Add To Favorites Print This Article Email Article To A Friend Post Comments   Rate This Article (0) 1 - Poor2345 - Good678910 - Excellent Added On 12-18-2009