Riba is the Arabic term for interest, which is prohibited under Islamic (Sharia) law regardless of the interest rate charged. In forex, this prohibition is the direct reason Islamic (swap-free) trading accounts exist, since the standard overnight swap charge is itself a form of interest on a leveraged position.
Brokers offering swap-free accounts typically replace the swap with a fixed, disclosed administrative fee instead, structured to avoid the interest classification while still covering the broker's financing cost.
Riba
The Islamic prohibition on interest — the underlying reason swap-free (Islamic) forex accounts exist.
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