Q: Can I borrow and repay Israeli shekalim (NIS) in the States even if the shekel rises? Conversely, can a person in Israel borrow and repay dollars?
A: Although we are dealing here with monetary loans, this question actually relates to merchandise loans (se’ah b’se’ah), because foreign currency is considered “merchandise” or a “commodity” relative to the local currency. (C.M. 203:8) Therefore, it is permitted to borrow foreign currency only in the three situations mentioned last week.
- Yesh lo: If the borrower already has a shekel, he may borrow more. The lender may even sell or give the borrower a shekel, and then lend him additional shekalim. (Y.D. 162:2)
- Yatza hasha’ar: Some authorities suggest that since NIS are readily available on the foreign currency exchange, it should be considered as yatza hasha’ar. However, most poskim disagree, because the exchange rate fluctuates constantly. (The Laws of Ribbis, 14:14)
- Davar Mu’at: The application of davar mu’at to foreign currency is highly questionable, since it is not common to borrow foreign currency from neighbors.
All these halachos apply, conversely, to borrowing and repaying dollars in Israel. However, a minority of poskim suggest that the dollar is also considered currency in Israel and permit dollar loans, since use of the dollar is fairly common there. (Bris Yehuda 20:9)
Authored by Rabbi Meir Orlian
These articles are for learning purposes only and cannot be used for final halachic decision. The Business Halacha email is a project of Business Halacha Institute (www.businesshalacha.com) and is under the auspices of Rav Chaim Kohn.