Riba History of Islamic economics

the common view of riba (usury) among classical jurists of islamic law , economics during islamic golden age riba , therefore unlawful apply interest money exnatura sua—exclusively gold , silver currencies—but not riba , therefore acceptable apply interest fiat money—currencies made of other materials such paper or base metals—to extent.

the definition of riba in classical islamic jurisprudence surplus value without counterpart. when currencies of base metal first introduced in islamic world, no jurist ever thought paying debt in higher number of units of fiat money riba concerned real value of money rather numerical value. example, acceptable loan of 1000 gold dinars paid 1050 dinars of total equal mass. rationale behind riba according classical islamic jurists ensure equivalency in real value , numerical value immaterial. interest rate did not exceed rate of inflation not riba according classical islamic jurists.