Q&A: Inconsistent Dollar-Shekel Exchange Rate
Inconsistent Dollar-Shekel Exchange Rate
Question
Hello Rabbi,
I have a service provider who supplies services to my business, at prices based on a dollar rate, since this is a product that I export. From time to time, irregularly, he approaches me demanding payment for several transactions together, but the conduct is not orderly. Quite often he asks to calculate the payment according to a different dollar-shekel exchange rate, which is not always clear.
Just for example, today he issued an invoice for 700 dollars, and asked to calculate it according to a rate of 3.65 (2,555 NIS),
today the representative rate closed at 3.66
whereas on the Bank of Israel website yesterday's representative rate was 3.63. The gap is 14 NIS.
It is important to note that the lack of transparency does not bother me from the standpoint that he is charging me a bit more. I am willing to accept that and waive any overcharge, if there is one. What does concern me is whether this manner of conduct raises any concern of the prohibition of interest.
Thank you in advance for the guidance.
Answer
No, there is no concern. This is a translation of the exchange rate, and it is not being charged as payment for waiting on money.
Discussion on Answer
Questioner, based on these questions and other questions you asked in the thread on a question of mine, I understand that you do not know at all what the prohibition of interest is. Instead of asking lots of specific questions, it seems to me that it would be worthwhile to take a very quick look at the laws of interest. All (!) the questions you asked are very far from interest.
Unrelatedly, if he is basically stealing from you, maybe there is an issue of "do not place a stumbling block." A question for Rabbi Michi.
Indeed. I see that you are very occupied with this. I suggest that you study the laws of interest in an orderly way.
David S.,
It may be that I do not have your knowledge, experience, and Torah understanding when it comes to the laws of interest.
After I studied the laws on this topic, I found myself even more confused. As someone who works in business, I try to improve and to be careful to observe the laws better and more precisely than before.
My question arose from reading the following article:
האם היתר עיסקא מועיל תמיד? וכיצד מותר להמיר שטרות בצ'יינג' – האם אין זה איסור ריבית?
Following my reading of the article, I wondered whether payment against another currency is considered interest, especially when the business owner is the one who sets the exchange rate.
If you have knowledge of these laws, I would be glad if you could explain why this situation is not considered interest.
Thank you very much!
I certainly do not mean this as a complaint. I truly mean that it is worth learning at least the basic laws of interest. It is very (very) clear why the article in Dirshu involves interest and your questions do not. Don’t read articles about interest; read a summary of a few paragraphs on the principles of interest, that will already be enough.
I understand very, very little about the laws of interest, but a little that I remember for your sake:
The three basic conditions for interest are: 1. a loan, 2. an addition to the principal, 3. stipulating the addition in advance.
From there it gets more complicated; a common red flag is “payment for waiting on money” — if you were paid because your money was delayed, then suddenly your money starts to look like a loan.
Broadly speaking, if you don’t have all three, or something similar, then you have no case to discuss at all. (Even if you don’t have #3, it is considered “the dust of interest” and is rabbinically forbidden, but here it gets complicated as far as I recall… I myself am not an expert.)
Rabbinically there are also “late interest,” “early interest,” and “verbal interest”… In short, there is a lot to learn. But all your questions do not deal with a loan, or something similar to a loan, or any waiting on money.
I’d be happy for a bit more explanation, because I simply don’t understand the halakhic logic.
I’m intentionally making the question more extreme.
If he can set whatever rate he wants,
one time he can set two percent and another time three percent on the amount I owe him, then he is essentially earning interest on the amount.
What am I not understanding here?