The value of money is a subjective analysis. Mathematically the value of money is its numerical value. The numerical value in itself has no meaning without its description. For example 100 Rupees has no meaning unless people go to market and try to exchange it with other goods and services. So value of money is concerned with how much goods and services money can buy. The value of Rupees in 2005 is not the same as its value in 2014. It is not that the goods prices have increased, rather the value of rupees have declined.
Can orange or bananas be summed together?
Here is a source of widespread confusion. More of something
in a lending contract is riba or interest. Here something must be identified.
Even mathematician will consider a description is necessary for justification
of an increment. For example four plus four equal eight does not mean that
eight is more than four. Only when four and eight is described it is possible to
say that eight is more than four. That is four bananas plus four bananas equal
eight banana. And not, four bananas plus four orange equal eight bananas. Hence
money must be identified in order to apply Islamic rule of riba or interest. During
prophet’s time-period, there existed two different currencies that are Dirhams
and dinars. Dirhams were silver money whereas dinars were gold money. Merely
words have no meaning unless they are defined and described.
Description of Money is necessary in Islamic monetary contracts:
Because money is not defined or described, it is senseless
to compare monetary contracts of different time period. Nobody will vote that
1990 100 rupees have same contents/value as its value in 2014. Following
information gives value of money/description of money in terms of Gold.
It can be found that the value of money remained 20 % jan 2010 onwards as compared to its value in Jan 2005
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