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Shimon, in Eretz Yisrael, makes a purchase on behalf of Reuven, in the diaspora. For Reuven the cost of paying in shekels would be quite high, but Shimon can receive the payment in another currency and pay a much smaller fee to convert the money to shekels. They therefore agree that, to minimize the total cost, Reuven will pay the amount due plus an amount that covers Shimon's cost to convert the money once he receives it. Naturally, both of them want to avoid any problems with ribbit while ensuring that Shimon isn't underpaid. This is not a loan; Shimon is acting as an agent for Reuven to make a purchase that Reuven cannot make directly.

First question: If one of the parties ends up profiting from the transaction because of currency fluctuations, is there a concern about ribbit? Or is ribbit only about loans, not cases where you ask somebody else to make a purchase for you? This might be different because the point of a loan is for the borrower to make use of the money, while here that's more of a side-effect.

If agency is the same as lending with respect to this, then would the answers to this question apply to the currency-conversion aspect of the repayment?

Second question: If agency is not the same as a loan, does halacha have anything to say on how they should decide what currency-conversion rate to use? The rate on the day of the purchase? On the day the funds are sent? The average rate over some recent period of time? Something else?

(I am not asking for a practical ruling, but rather for the halachot that would inform the decision.)

  • I would think that the main concern would be agreement. If there is a small, insignificant discrepancy in the exchange rates (and there almost certainly will be), then the two sides agree to use a certain rate and try to minimize the discrepancy. I don't see that ribbit comes into it. – Epicentre Aug 26 '15 at 4:35
  • @Epicentre I don't know enough about ribbit to know if it's broader than loans, hence the question. – Monica Cellio Aug 26 '15 at 12:50
  • The problem with futures and ribis does not apply to fiat money. If I had the time to look up sources, this would be an answer. Perhaps someone can take the suggestion to Google and have some success writing one. – Micha Berger Sep 1 '15 at 23:56
  • @MichaBerger thanks for the comment, and also for teaching me a new term (I'd not heard "fiat money" before). Also, hi! It's been a while! – Monica Cellio Sep 2 '15 at 0:26
  • @Epicentre I'm not sure if "insignificant discrepancy" is a heter. Both sides agreeing is definitely not. – LN6595 Dec 30 '15 at 17:00
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You can avoid this whole problem simply. Shimon can purchase the item on his own, with the understanding that Reuvein will then buy it from Shimon. A resale, unlike a reimbursement, steers clear of all Ribbit issues, and Shimon may charge any reasonable price.

(Note: for this to work, Reuven must be under no obligation to buy the item. However, in typical cases Reuven wants the item so it’s irrelevant unless the item is lost/ damaged, etc. )

  • Couldn't Reuven and Shimon enter into a contract requiring Reuven to purchase the item from Shimon prior to Shimon's acquiring the item? – Daniel Jul 1 '18 at 19:03
  • @Daniel Very likely. I don’t know. You just want to avoid Shimon becoming Reuven’s agent. – LN6595 Jul 5 '18 at 19:55

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