halachos of Ribbis – the prohibition of paying interest – are numerous and
complex, but we shall try to present a very brief summary with regard to the
subject at hand.
situations of inflation or deflation, the Halachah regards the currency as being
stable and everything else as fluctuation. So if one borrows, for example, $100,
one pays back $100, even if there was deflation in the interim and the $100 has
more buying power than it did at the time of the loan. If, however one borrows
anything other than currency, e.g. food, goods etc. there is a concern that in
the interim there may be inflation, and the goods will increase in value, so
that if one repaid the same amount of goods one would actually be paying
interest. For example, if one borrowed a kilo of flour from a neighbour, and
returned it a week later, and in the interim the price of flour increased,
returning a kilo of flour would entail repaying the loan with something that is
worth more than the original loan, which involves the prohibition of paying
Therefore, in general Chazal prohibited lending anything
other than currency, for fear that the value may increase before the repayment
of the loan.
However, there are two leniencies built in to this
prohibition. Firstly, if the price is stable, it is permitted, because there is
no concern that the price will increase. Secondly, if the borrower has at least
a small amount of the borrowed item, it is also permitted. For example, it would
be permitted to borrow a kilo of flour if the borrower has at least some flour
of his own at home.
about different currencies? The consensus of opinion among the Poskim is that
foreign currency that is not readily usable in the country where the loan is
taking place is considered as goods rather than currency. So to borrow Canadian
dollars in Israel would not be permitted unless the borrower owned at least one
Canadian dollar of his own.
approach the question in hand. What if the loan took place in the local
currency, but the repayment takes place in a different country in the local
currency of the place of repayment? For example, one lends shekels in Israel
with the repayment in Canadian dollars in Canada.
would appear to be a difference of opinion as to how to regard this loan.
Yosef Gelber (Nesivos Sholom 162:1) is inclined to consider this as a loan of
money, as this is the local currency at the time of the loan. As such, there
would be no problem with the actual loan. When the time would come to repay the
loan in Canada, one could either pay the same amount of shekels that was
borrowed or alternatively, pay the amount in Canadian dollars at the exchange
rate of the time of repayment.
want to fix the repayment in Canadian dollars at the exchange rate which is
valid at the time of the loan, in effect the "lender" is buying dollars,
and it would only be permissible if the borrower in Canada has in his possession
the entire value of the loan in Canadian dollars – Bris Yehudah
Yaakov Blau, however, (Bris Yehudah 18 footnote 15) is inclined to view the loan
as being a loan of goods rather than currency. Because the condition of the loan
was that it be repaid in Canada, not Israel, he regards it as if the loan
actually took place in Canada. And since the shekel is not a valid currency in
Canada, such an arrangement would be prohibited unless the borrower had at least
one shekel in his possession at the time of the loan.
our case, if your brother in Canada has at least one shekel in his
possession, he can ask your mother to lend him shekels in Israel (by
paying off any debts that he has there). If he doesn’t have any
shekels, ask your mother to give someone a shekel to acquire it on his
behalf. Once he now owns a shekel, the arrangement is permitted, as
explained earlier. Again, the repayment in Canada would be in shekels, or in
Canadian dollars at the exchange rate which is valid at the time of the
again, if you want to fix the repayment in Canadian dollars at the exchange rate
which is valid at the time of the loan, in effect the "lender" is buying
dollars, and it would only be permissible if the borrower in Canada has in his
possession the entire value of the loan in Canadian