He sold some goods to a trader in his county’s currency, then the value (of that currency) dropped a great deal; in what currency should the price of the goods be paid?

Praise
be to Allah.

The scholars
(may Allah have mercy on them) differed concerning the impact of a drop in
value of a currency on debts incurred prior to the drop in value. In
al-Mawsoo‘ah al-Fiqhiyyah (21/138) it says: 

Rise and fall in
value of currency 

The value of a
currency may rise or fall in relation to gold and silver, which are regarded
as the standard against which the prices and values of things are measured,
and prices are determined on that basis. This is what the fuqaha’ refer to
when they speak in this context of rise and fall in value. 

In this case, when
the value of the currency has changed, either rising or falling, after the
debt has been confirmed, whether it is a loan, a delayed mahr, a business
transaction or anything else, and before the debtor has paid it, then the
fuqaha’ differed as to how the debtor is obliged to pay. There are three
views: 

-1-

The first view is
that of Abu Haneefah, the Shaafa‘is, the Hanbalis, and the Maalikis
according to their well-known view. This view states that the debtor must
pay it off in the same currency as is mentioned in the contract, in which
the value of the debt was confirmed and written, without adding or
subtracting anything, and the lender is not entitled to anything else.
al-Qaadi Abu Yoosuf followed this view originally, then he recanted it. 

-2-

The second view is
that of Abu Yoosuf, and is the basis on which fatwas were issued by the
Hanafis. This view states that the debtor must pay the equivalent value in
the most commonly used currency on the day when the contract was drawn up.
In the case of a business transaction, it is the day on which the contract
was drawn up; in the case of a loan, it is the day on which the loan was
received. 

-3-

The third view is
another view held by the Maalikis. This view states that if the change is
huge, then the value of the amount in the currency that either rose or fell
must be paid off in another currency. But if the difference is not huge,
then it should be paid in the same currency. Ar-Rahooni said, commenting on
the well-known Maaliki view that it must be paid in the same currency, even
if the value has changed: I say that he should limit that to cases where the
value did not change hugely. End quote. 

The view that is
most likely to be correct – and Allah knows best – is the view of the
majority of the four madhhabs, which is that the debt must be paid off in
the same currency as that which was agreed upon when the transaction took
place, and the business contract remains as it is and cannot be annulled. 

The view that the
debtor should pay the value of the currency, and not the exact amount, would
lead to making him bear the consequences of the drop in its value and
transfer the harm from the lender to the debtor. But the shar‘i principle
states that harm cannot be removed by means of another. This drop in value
may happen to wealth even if the owner keeps it in his own hands. 

Al-Kaasaani said:
If the currency has not become invalid, but its value has dropped or
increased, then business transactions do not become annulled, according to
scholarly consensus, and the purchaser must pay the exact figure he owes; no
attention is to be paid to its value in this case. 

End quote from
Badaa’i‘ as-Sanaa’i‘, 5/542 

It says in a
statement of the Islamic Fiqh Council, no. 42 (4/5): 

What matters with
regard to paying off debts that are confirmed in a particular currency is
that they should be paid off in that currency, not on the basis of its
value, because debts are to be paid exactly as they are; it is not
permissible to connect a fixed debt to the price of things (inflation),
regardless of how the debt came about. 

Please see the
answer to question no. 68842. 

However, the one
who owes something to another person in this case should be kind when paying
it off. Al-Bukhaari (2183) and Muslim (1601) narrated that Abu Hurayrah
said:

A man was owed
something by the Messenger of Allah (blessings and peace of Allah be upon
him) and he spoke to him in a harsh manner, and the Prophet (blessings and
peace of Allah be upon him) wanted to sort him out. The Prophet (blessings
and peace of Allah be upon him) said: “The one who has a right is entitled
to speak.” And he said to them: “Buy a camel for him and give it to him.”
They said: We cannot find anything but a camel that is better than his. He
said: “Buy it and give it to him, for among the best of you – or the best of
you – are those who are the best in paying off debts.” 

This is more
applicable in the following case: if he delayed paying off the debt with no
excuse, or he was careless about it, until the value of the currency
dropped, then his delay is indeed wrongdoing on his part towards his
brother, as he caused him to be unable to make use of his wealth at the time
when he needed it, and its value dropped because of inflation. Hence he has
to ask his brother to forgive him for his mistreatment, and he must pay him
back well, especially when some of the scholars have said that this is what
he is required to do; he is required to repay the lender well, on the basis
of what is mentioned above. Avoiding an area concerning which the scholars
differed in such cases is definitely encouraged. 

And Allah knows
best.