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The State Bank of Pakistan (SBP) has signed an agreement with the International Finance Corporation (IFC) to strengthen local currency financing and encourage private sector growth in Pakistan, according to a statement released on Monday.
The World Bank noted that borrowing in foreign currencies exposes companies to exchange rate risks, as debt payments increase when the local currency depreciates. Through local currency financing, borrowers can reduce such exposure and maintain financial stability.
The SBP said the agreement, signed under the International Swaps and Derivatives Association (ISDA) framework, will allow the IFC to manage currency risks more effectively and increase its investments in Pakistani rupees.
“This partnership is an important milestone in unlocking financing for key sectors of the economy and generating employment opportunities across Pakistan,” the central bank stated.
SBP Governor Jameel Ahmad emphasized that supporting private sector growth is vital for sustainable economic development and that collaboration with the IFC will further improve access to financing opportunities.
1/2 Promoting private sector growth in Pakistan is paramount to successful, sustainable economic development of the country; says Governor #SBP Mr. Jameel Ahmad while signing agreement with IFC to strengthen local currency lending in Pakistan🇵🇰.https://t.co/Ty5iCenX7L pic.twitter.com/xoeHDH6yJ6
— SBP (@StateBank_Pak) October 20, 2025
John Gandolfo, IFC vice president and treasurer for treasury and mobilisation, said that amid global currency fluctuations, access to local currency financing is more important than ever. He called it a strategic priority for the World Bank Group and a key driver of Pakistan’s economic growth.
The SBP added that this partnership will strengthen economic resilience, promote private sector development, and enhance foreign exchange liquidity in Pakistan.
