ISLAMABAD – October 21, 2025
In a major move to strengthen economic resilience and unlock private sector growth, the State Bank of Pakistan (SBP) has signed a pivotal agreement with the International Finance Corporation (IFC) — a member of the World Bank Group — to expand local currency financing in Pakistan, the central bank announced on Monday.
The agreement, signed under the International Swaps and Derivatives Association (ISDA) framework, will enable the IFC to better manage currency risk while increasing investments in Pakistani rupees, a step considered vital in reducing dependency on hard currencies like the US dollar.
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
“This partnership is an important step towards unlocking financing for critical sectors of the economy and creating jobs across the country,” said SBP Governor Jameel Ahmad, emphasizing the role of the private sector in driving sustainable economic development.
John Gandolfo, IFC Vice President for Treasury and Mobilization, echoed this sentiment, stating, “With currency volatility posing significant risks to developing economies, access to local currency financing has never been more important.”
The initiative comes amid ongoing efforts to stabilize Pakistan’s economy and foster investor confidence. It addresses one of the key challenges facing emerging markets: exchange rate risk, which occurs when companies borrow in foreign currencies but earn revenue in local currency.
You May Also Like: Pakistan-Afghanistan Peace Depends on Taliban Ending Cross-Border Terror, Says Defence Minister Asif
The SBP-IFC collaboration aims to enhance foreign exchange liquidity, facilitate infrastructure investment, and deepen financial market development through innovative financial instruments.
The development follows recent meetings in Washington between Finance Minister Muhammad Aurangzeb and IFC officials, where both sides reaffirmed their commitment to scaling up private sector investment in Pakistan.
