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In the Name of God بسم الله
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Gulliver

Iranian Interest Rates

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I came across this article in the UK Guardian today:

Iran interest rate cut sparks panic selling

Iran's financial system suffered a fresh jolt yesterday with panic selling on the stock market after the president, Mahmoud Ahmadinejad, abruptly ordered banks to cut interest rates sharply, despite surging inflation.

The order, which Mr Ahmadinejad issued by telephone during a visit to Belarus and which flew in the face of expert advice - has triggered warnings of a financial crisis and spiralling corruption amid fears of a capital flight from the country's lending institutions.

[...]

Full story here.

Can anyone please explain to me the thinking behind interest in Iran? I was always under the impression that the taking of interest (riba) (1) was haram. According to (2), Ayatollah Sistani considers the charging of interest by corporations and institutions to be "unjust and usurpation". Khamenei apparently allows the taking of interest from non-muslims by muslims (3), but I'm pretty sure that Iranian banks charge interest to both.

How is it that Iranian banks are authorised to take any interest at all?

Gulliver

(1) http://www.al-islam.org/organizations/Aali...k/msg00828.html

(2) http://www.al-islam.org/organizations/Aali...k/msg00418.html

(3) http://www.al-islam.org/organizations/Aali...k/msg00088.html

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As an economy grows, its price levels began to increase, and dont accurately reflect the value of the money. Basically too much money floating around in the economy. Raising interest rates clamps down on the money supply.

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As an economy grows, its price levels began to increase, and dont accurately reflect the value of the money. Basically too much money floating around in the economy. Raising interest rates clamps down on the money supply.

hes asking on a religious level not a business scale, I think the question is why does Iran allow Interest rate. Personally, in the world we live in today we have to work with interest rate which is what Iran is rightly doing. By the way my first post :blush:

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As an economy grows, its price levels began to increase, and dont accurately reflect the value of the money. Basically too much money floating around in the economy. Raising interest rates clamps down on the money supply.

Yes, thanks for the primer on economic theory.

The topic starter, however, is saying interest rates are haram, meaning how does interest fit into Iranian life at all?

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hes asking on a religious level not a business scale, I think the question is why does Iran allow Interest rate. Personally, in the world we live in today we have to work with interest rate which is what Iran is rightly doing. By the way my first post :blush:

Yes, but isn't this a slippery slope? A little haram today, a lot of haram tomorrow?

First interest rates, then bacon, then bikinis, then fornication!

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Salaam allaikum,

From what i understand they work with the money (invest it) and then pay a dividend to the people. So its more of a business investment than the western concept of "loans" and "interest"

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Salaam allaikum,

From what i understand they work with the money (invest it) and then pay a dividend to the people. So its more of a business investment than the western concept of "loans" and "interest"

Then there wouldn't be an "interest rate" at all. You appear to be mistaken regarding the subject of this article.

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As a matter of investment, Ayatollah Sistani's discussion of interest seems to indicate that the only haram form of interest is for a Muslim to pay interest to a non-Muslim. This is in fact probably what was originally intended since at the time of the Prophet, most money-lenders were not Muslim.

no you have it mixed up ots the other way around, interest is haram if you take it and offer it from others,

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