Foreign Currency and Interest
- Rashba respona 4:287 forbids lending money of one currency for another currency since the coins change fixed with respect one to another.
---Just Notes--- Ribbit Halacha Lmaaseh Brit Pinchas case1 matbeya to matbeya. halvah. borrow shek for shek muter, case2 matbeya to pierot. pesika. in israel borrow shek return dollar, if you are koveh price acc to time of halvah then you need the entire amount that you're mitchayev to give. if you are koveh price acc to time of piraon that's muter. case3 peirot to pierot. seah bseah. in israel borrow dollar for dollar he needs yesh lo case4 peirot to matbeya. sale/tarsha. borrow dollars for shek koveh acc to time of halvah muter. acc to time of piraon asur unless he has some dollars and could return it then he can even return with shek with yesh lo. case5 pierot to another pierot. sale/asur. seah chtim seah dochen. koveh acc to time of halvah muter if has all of the second coins from beginning. acc to time of piraon asur unless could return what borrowed
Borrowing and returning done in Israel. borrow shek for shek muter, borrow dollar for dollar he needs yesh lo. borrow shek return dollar, if you are koveh price acc to time of halvah then you need the entire amount that you're mitchayev to give. if you are koveh price acc to time of piraon that's muter. borrow dollars for shek koveh acc to time of halvah muter. acc to time of piraon asur unless he has some dollars and could return it then he can even return with shek with yesh lo. borrow dolalrs for another foreign currency koveh acc to time of halvah muter if has all of the second coins from beginning. acc to time of piraon asur unless could return what borrowed halvah in israel return in america or vice versa. shek for shek or dol for dol muter. borrow shek and return dollars acc to time of halvah he needs to have all coins. acc to time of piraon if borrow shek in israel and returned dolalrs in america muter
igm yd 3:37, shvet halevi 3:119 say dollars in israel are matbeya but ribit yehuda 18:5 argues
Torat Ribbit 19:14 muter if borrow shek in israel for shek in america. brit yehuda 13:12 argues that you need matbeya of piroan place. torat ribit thinks enough to be matbeya of either place
sa harav seif 30 if you have possiblity to pay bmatzbeya borrow foreign to return with local matebya either 1. pay acc to time of halva or 2 specify a day or 3 sa harav 30 option to pay with local currency acc to time of halva or ype of foriegn one he borrowed
shek in israel for dollars in america is problem unless if you pay acc to price of halva only muter if a you have all of the type that you're going to pay b. speak with lashon mechira not halva, c dont say it is price bc of hakdamat maot. if pay time of piraon muter. torat ribit 19:16 brit yehuda 20 fnt 29. time of piroan is asao damim chazon ish 72:6
Expired or Altered Currency
The system of coins used in the days of the Gemara and Shulchan Aruch were intrinsically valuable commodities, such as silver or gold. In that system the size and weight of the money and the value of that metal determined the value of the coins. This is known as commodity money and is associated with the theory of economics metallism. Another system used is representative money which could be used to redeem a commodity; this is also known as the gold standard. In 1971, America replaced this system with fiat money, theoretically understood by chartalism, which has no intrinsic value and no representative value but has a value based on the government.
Fiat Money (Chartalism)
- Today most money is paper or digital money, which has no intrinsic value and not representative of a commodity value. It is evaluated according to the assigned value according to the government and world markets.
- It is forbidden to lend money and charge for inflation.
- If a coin is invalidated and replaced with a new coin in a fiat money system the new coins need to be repaid since the size and weight of the old or new coins are irrelevant to the value of the coin. If the new coins has a different purchasing power compared to the old coins, if someone lent money in an old coin one must return the new coins according to the value the new coins have in relation to the old coins.
Commodity Money (Metallism)
- If the new currency is the same size and weight as the old currency but its purchasing power is different one can simply repay the loan with the new currency.
- If a person lent someone money in a currency and then that currency become invalidated and was replaced with a new coin, if the new coin is thicker or weightier than the old one, whether or not one can simply repay the loan with the new currency depends on the following factors:
- If the prices of the marketplace reflects the new coin's thickness or weight then one can't repay the loan with the new currency, rather one should pay the amount of the new coins so that the sum total equates to the amount of silver of the old coins borrowed.
- If the prices of the marketplace do not reflect the new coin's thickness or weight and simply changed prices because of changes in supply and demand, one can repay with the new currency unless the new coin is more than 25% larger, in which case one needs to repay the amount of silver borrowed with the old coins.
- If one should have paid the new coins up to the quantity of silver that was borrowed and instead one repaid the loan with the new currency some say that it was a violation of biblical interest and some say rabbinic.
- We rely on non-Jewish experts to tell us that the coins are more or less than 25% larger than the old coins. If you are asking a hired professional economist they are trusted and if you're asking someone else you should ask two non-Jews one not in front of the other.
- If the government establishes how the old loans should be repaid then one can follow that standard based on dina dmalchuta dina.
- Gemara Bava Metsia 44a-b
- Igrot Moshe YD 2:114 explains that since halacha views coins as stable and not changing charging for the inflation of the purchasing power of the coins is interest. The only time coins are reevaluated in Shulchan Aruch Y.D. 165:1 is if the coins changed sizes, however, the Rama there writes that if the purchasing power changed but not the size of the coin then one must return the new coins irrelevant of the inflation. Chazon Ish YD 74:5, Minchat Yitzchak 1:70, 6:161, and Laws of Ribbis p. 52 agree. Note that Rav Moshe is discussing fiat money in 1971 and the Chazon Ish representative money as is evident in their words.
- Gemara Bava Kama 97a discusses whether a person who borrowed coins and the coins expired under the monarch they were minted under can return those same coins now that they are expired. Shmuel holds that you are supposed to return the old coins since the coins expiring isn't like they broke.
- Chazon Ish YD 74:5
- Rama 165:1
- Shulchan Aruch 165:1
- Shulchan Aruch 165:1
- Shach 165:2
- Rama 165:1, Shach 165:7
- Rama 165:1, Shach 165:8