In three verses of the Qur’an Allah Most High has prohibited the unjust diminishing of value of people’s wealth (Wa la tabkhasun naasa ashya-ahum).

This unjust diminishing of value of people’s wealth is sometimes achieved through inflation. Hence it is Haram.

Inflation is defined as the constant increase in prices for a reason other than that related to market forces of supply and demand. The reason for Inflation is usually the unjust fall in value of money.

When gold and silver are used as money, the value of money remains relatively stable. The price of a sheep in gold dinars 1000 years ago is relatively the same as today’s price.

When, however, money with intrinsic value is removed from the market and is replaced with bogus fraudulent money with fictitious value then that value can be manipulated to constantly diminish. As money falls in value, prices rise. It is that phenomenon which is known as Inflation. It is an instrument through which the masses are unjustly impoverished while a predatory elite grow richer and yet richer while drinking the blood sweat and tears of the innocent masses.