The State Bank of Pakistan (SBP) has signed an important agreement with the International Finance Corporation (IFC), a member of the World Bank Group, to promote local currency financing and support private sector development in Pakistan.
Under the International Swaps and Derivatives Association (ISDA) framework, this partnership will allow IFC to better manage currency risks and increase investments in Pakistani rupees. The SBP said the initiative aims to expand access to local currency lending and unlock financing for key sectors of the economy.
SBP Governor Jameel Ahmad said the agreement marks a significant milestone in supporting economic stability and job creation. “Promoting private sector growth in Pakistan is essential for sustainable economic development,” he stated. “This partnership with IFC will enhance financing opportunities for businesses through local currency solutions.”
John Gandolfo, IFC Vice President and Treasurer, also highlighted the importance of the move. He said that with currency volatility increasing globally, access to local currency funding is more important than ever for developing economies. Gandolfo added that the World Bank Group sees this partnership as a key step in promoting financial growth and stability in Pakistan.
The SBP explained that many businesses in developing countries face difficulties when borrowing in foreign currencies but earning in their local ones. This creates a currency mismatch that can threaten financial resilience. The agreement with IFC, according to the central bank, will help reduce those risks and support broader economic stability.
IFC reaffirmed its commitment to using innovative financial tools and partnerships to strengthen access to local financing. It also said that the collaboration would help improve foreign exchange liquidity and provide more secure funding channels for private companies.
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Through this agreement, both SBP and IFC aim to build a stronger financial system, boost private investment, and promote long-term economic resilience in Pakistan.
