Economic Issues Interest vs Inflation
Question:
Answer:
There are two issues that need consideration in your question:
1. Interest versus inflation
2. What to do if the only way of living with dignity and security is to use interest money
As for the first issue, there is no problem if a person receives an inflationary adjustment for the money that he has lent. This adjustment however should be made only after the actual inflation has occurred. After the inflationary adjustment what ever (if any) remains from the gained (extra) money will be pure interest and needs to be avoided.
As for the second issue, every human being has a right to have dignity and safety in his life. Although collecting interest is a grave sin, however if this is the only way by which a person can survive then based on the general spirit of Sharia that allows exceptions in exceptional cases, the person may get use of interest to satisfy his essential needs. I again emphasise that two elements need to be there to allow this flexibility, one 'necessity' and two 'absence of any other solution'.
I have tried to explained the concept, the application of this concept in Pakistan and your personal life is one that only you can think of and judge about.
Abdullah Rahim
Understanding Islam UK
5th of May, 2010
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