Wa `alaykum as-Salamu wa Rahmatullahi wa Barakatuh.
In the Name of Allah, Most Gracious, Most Merciful.
All praise and thanks are due to Allah, and peace and blessings be upon His Messenger.
In this fatwa:
In his response to your question, Prof. Dr. Monzer Kahf, Professor of Islamic Finance and Economics at Qatar Faculty of Islamic Studies, states:
The principle is: a loan is paid back in the same currency and quantity it was given. Without being a condition in the contract (even verbal contract) it is good to give more at time of repayment. This is a kind of beautiful repayment.
If the deterioration of the value of the loan currency is big, an amicable reconciliation between the parties is recommended. If they do not reach it amicably, an agreed Arbitrator or Court of law may impose a fair reconciliation after studying all circumstances of the two parties and their economic environment.
Allah Almighty knows best.
Editor’s note: This fatwa is from Ask the Scholar’s archive and was originally published at an earlier date.