Interest Rate Swap Contracts; a Survey from the Imamiyyah Jurisprudential Viewpoint

Nowadays, as financial institutions have developed and the scope of trading has extended, risk management has become significantly important in the economic studies, and various approaches and instruments have been developed to manage and reduce the different types of risks. One of widely-used instruments in risk management is swap contract, in which a set of fixed cash flows is exchanged with a set of floating cash flows. Interest rate swap contracts, as a type of swap contracts, play a critical role in managing and hedging the interest rate risk. This article, besides introducing this financial instrument, using a jurisprudential approach, tries to investigate the possibility of using this contract from the viewpoint of Imamiyyah jurisprudence and examines the possibility of its being adapted to the common Islamic contracts. In this study, the possibility of interest rate swap contract's being adapted to "Baial-dain bil dain", "Bai al-Kali bil Kali" and "Solh dain bil dain" has been examined and the practicability of their being used in the form of "Solh dain bil dain" has been confirmed. As to the interest rate swap contracts, due to the doubt of their being Gharar and Riba, we concluded that the common interest rate swap contracts in the west are not compatible with the principles of Islamic contracts and Shia jurisprudence, and that we may not use this instrument in the Iranian markets.