SBP, IFC partners to boost local currency lending

October 20, 2025 (MLN): The State Bank of Pakistan has signed an agreement with the International Finance Corporation to expand local currency financing and strengthen private sector growth across the country.

The partnership will enable IFC, the World Bank Group's private sector arm, to manage currency risks more effectively through an ISDA agreement and boost its investments in Pakistani rupees.

This initiative represents a crucial step toward supporting key economic sectors and creating employment opportunities throughout Pakistan, according to a press release by SBP.

Governor of the State Bank of Pakistan, Jameel Ahmad, emphasized that promoting private sector growth is essential for successful and sustainable economic development in the country. He stated that the partnership with IFC aims to enhance financing opportunities for the private sector, which plays a vital role in Pakistan's economic progress.

John Gandolfo, IFC Vice President and Treasurer for Treasury & Mobilization, highlighted the critical importance of this initiative given current global economic conditions.

He noted that currency volatility poses significant risks to developing economies, making access to local currency financing more important than ever.

Gandolfo described promoting this type of financing as a strategic priority for the World Bank Group and a catalyst for economic growth in Pakistan.

The agreement addresses a major challenge faced by companies in developing economies that borrow in hard currencies like the U.S. dollar while earning revenue in local currencies.

This currency mismatch is essential not only for strengthening local businesses' ability to navigate risks and maintain financial resilience but also for supporting broader economic stability.

IFC has committed to leveraging innovative financial instruments and strengthening partnerships to address the growing need for local currency financing in emerging markets.

Through this collaboration with the State Bank of Pakistan, IFC aims to bolster economic resilience, promote private sector development, and improve foreign exchange liquidity in Pakistan's financial system.

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