Understanding Dollar Hoarding Meaning in Islam

A man buys and hoards dollars and sells them when they become expensive. Is it permissible to do so? There are different items to be stored, such as necessities, luxuries, etc. While there are many types of storage, so one item or one kind of order cannot be imposed on everyone.

In today’s globalized economy, hoarding dollars has become a significant issue, especially in countries experiencing economic instability. But what does “Dollar Hoarding” mean in the context of Islam? This article will delve into dollar hoarding, its implications, and its standing in Islamic teachings. We’ll explore the moral, economic, and religious perspectives, providing valuable insights for those interested in profoundly understanding this topic.

What is Dollar Hoarding?

Dollar hoarding refers to accumulating and holding onto significant amounts of US dollars rather than spending or investing them. This behaviour often occurs in regions where the local currency devalues, leading people to save dollars to safeguard against economic instability. Essentially, dollar hoarding is a protective measure against wealth erosion.

For example, it is permissible to store food items, such as food and grains, and daily necessities for a short period to make a reasonable profit. However, it is a sin to delay it so much that people are forced to buy at exorbitant prices.

Suppose the necessities are readily available in the market, and people can get them quickly. In that case, storing them to predict the future is permissible.

But it would be illegitimate if its purpose was to create artificial scarcity. The Prophet (peace and blessings of Allaah be upon him) has condemned those who sell at high prices by creating an artificial shortage of necessities.

It is also illegal to stockpile luxuries in such a way as to cause inconvenience to the people but with a slight concession. These items can also be stored for a reasonable profit, but it is not permissible for them to be involved in creating artificial shortages.

The dollar or other foreign currencies fall into this category. Buying and storing dollars in a market that has affected the price is illegal. If it is stored in a small amount, which does not affect the price, then there is no problem.

The principle of all jurists regarding hoarding is that hoarding is unlawful only if it harms the general public due to hoarding. If there is a demand for something in the market but the hoarder does not bring it to the market to sell, or even if he brings it, he will make an illegal profit. If there is no harm to the people due to hoarding and there is an abundance of this in the market, then hoarding will not be illegal.

However, hoarding food items or other necessities will be stopped at all costs. The Holy Prophet (peace and blessings of Allaah be upon him) said: “Whoever sells grain to Muslims at a high price, Allaah will make him suffer from leprosy and poverty. In another narration: “Whoever withholds grain for forty days with the thought of inflation, it is as if he is disgusted with God and God is displeased with him.”

Economic Implications of Dollar Hoarding

Dollar hoarding can have several economic impacts, including:

  • Reduction in Local Currency Circulation: When individuals hoard dollars, they withdraw significant amounts of local currency from circulation, leading to liquidity shortages.
  • Inflationary Pressures: As the demand for the local currency decreases, its value can decline, leading to inflation.
  • Economic Instability: Large-scale hoarding can destabilize the economy, causing uncertainty and discouraging investment.

Dollar Hoarding in Islamic Teachings

Islam provides comprehensive guidance on economic behaviour, emphasizing fairness, justice, and social welfare. The practice of hoarding, whether money, food, or other resources, is generally discouraged in Islam.

The Concept of Hoarding (Ihtikar) in Islam

“Ihtikar” refers to hoarding goods and waiting for their prices to increase. This practice is explicitly condemned in Islamic teachings. The Prophet Muhammad (PBUH) said, “Whoever hoards is a sinner” (Muslim). This principle can be extended to the hoarding of currency, including dollars.

Islamic Economic Principles

Islamic economic principles advocate for:

  • Fair Distribution of Wealth: Wealth should circulate within the community, promoting economic balance and social justice.
  • Avoidance of Exploitation: Hoarding can lead to exploitation and is against the principles of fairness.
  • Encouraging Trade and Investment: Islam promotes using wealth in productive activities, such as trade and investment, which benefit society.

Why Dollar Hoarding is Discouraged in Islam

Moral Implications

Hoarding dollars, particularly in economic distress, can be seen as selfishness, prioritizing personal security over communal welfare. Islam teaches the importance of altruism and helping those in need.

Social Impact

When individuals hoard dollars, they contribute to the scarcity of foreign currency, exacerbating economic challenges for others. This act can lead to widespread financial difficulties, affecting the less fortunate disproportionately.

Encouraging Positive Economic Behavior

Islamic teachings encourage Muslims to engage in behaviours that benefit the community:

  • Zakat (Charity): One of the Five Pillars of Islam, zakat requires Muslims to give a portion of their wealth to those in need, ensuring wealth redistribution.
  • Sadaqah (Voluntary Charity): Beyond zakat, sadaqah encourages continuous giving and support for the community.

How to Address Dollar Hoarding

Educating the Community

Increasing awareness about the negative impacts of dollar hoarding and its conflict with Islamic principles is crucial. Educational programs and sermons can play a significant role in changing behaviours.

Promoting Trust in the Local Economy

Governments and financial institutions should work towards creating stable economic conditions that reduce the need for hoarding dollars. Confidence in the local economy can discourage individuals from holding excessive foreign currency.

Encouraging Ethical Investment

Islamic finance offers various avenues for ethical investment that align with religious principles. Encouraging Muslims to invest in halal (permissible) ventures can help reduce hoarding tendencies.

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Mufti Taqi Usmani about Dollar Hoarding

Mufti Taqi Usmani said that buying dollars for profit, given the country’s rising dollar prices and economic difficulties, is a grave sin due to disloyalty and hoarding with the beloved homeland. Mufti Taqi Usmani said that buying dollars to sell when the price goes up is hoarding, which is a sin according to Sharia, and those who do so are cursed in the light of Islamic Sharia.

It should be noted that it is permissible to buy and keep dollars or any foreign currency and sell it when the price goes up, provided that buying and selling is cash (hand in hand), i.e. not borrowed. But suppose the dollar is so low that it is not generally available in the market, or its price is rising abnormally. In that case, this increase is not due to the natural fluctuations of the market, i.e. demand and supply.

Instead, it is because your dollar is being bought and stocked. If it harms the country and the nation, then doing so will fall into the category of hoarding, which is a sin, according to Shari’ah.

Frequently Asked Questions

What is the Islamic perspective on wealth accumulation?

Islam encourages wealth accumulation through permissible means, provided it is used responsibly and benefits society. Hoarding, however, is discouraged as it can lead to social and economic imbalances.

How does dollar hoarding affect the local economy?

Dollar hoarding can reduce the circulation of the local currency, cause inflation, and contribute to economic instability by creating liquidity shortages.

Are there any permissible ways to save money in Islam?

Yes, saving money is permissible in Islam, but it should be done in a way that does not harm the economy or society. Investing in halal ventures and keeping reasonable savings for personal security is encouraged.

What are the alternatives to hoarding dollars?

  • Investing in Local Businesses: Supporting local enterprises helps stimulate the economy.
  • Islamic Banking Products: Utilizing products like sukuk (Islamic bonds) and mudarabah (profit-sharing) agreements.
  • Charitable Giving: Engaging in zakat and sadaqah to support those in need.

How can one balance personal financial security and Islamic principles?

One can achieve this balance by ensuring one’s financial practices do not harm others. Ethical investments, regular charitable contributions, and avoiding excessive hoarding are crucial to aligning personal security with Islamic values.


Understanding the meaning of dollar hoarding in Islam reveals its economic and moral implications. Islam’s teachings encourage the fair distribution of wealth, social justice, and avoiding exploitation. By adhering to these principles, Muslims can contribute to a more balanced and just economy, avoiding the negative consequences of hoarding. Educating the community, promoting trust in the local economy, and encouraging ethical investments are essential steps in addressing the issue of dollar hoarding. Through these efforts, we can ensure that Islamic values maintain economic stability and social welfare.

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