KARACHI: The State Bank of Pakistan (SBP) has partnered with the World Bank Group, through its private sector arm, the International Finance Corporation (IFC), to expand local currency financing and support private sector growth in Pakistan.
According to SBP, through an ISDA agreement, the partnership will enable IFC to manage currency risks more effectively and increase its investments in Pakistani rupees. This is an important step towards unlocking financing for critical sectors of the economy and creating jobs across the country.
“Promoting private sector growth in Pakistan is paramount to successful, sustainable economic development of the country,” said Jameel Ahmad, the Governor State Bank of Pakistan.
The partnership with IFC aims to enhance financing opportunities for the private sector, he added. “With currency volatility posing significant risks to developing economies, access to local currency financing has never been more important,” said John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization. “Promoting this type of financing is a strategic priority for the World Bank Group and a catalyst for economic growth in Pakistan.”
Exchange rate risks pose a significant challenge for companies in developing economies that borrow in hard currencies, such as the US dollar, while earning revenue in local currencies. Addressing this currency mismatch is essential not only to strengthen local businesses’ ability to mitigate risks and maintain financial resilience, but also to support broader economic stability.
IFC is committed to leveraging innovative financial instruments and strengthening partnerships to address the growing need for local currency financing in emerging markets. Through this partnership with IFC, SBP aims to bolster economic resilience, promote private sector development and improve foreign exchange liquidity in Pakistan.
IFC, a member of the World Bank Group is the largest global development institution focused on the private sector in emerging markets. IFC works in more than 100 countries and in fiscal year 2025, IFC committed a record USD71.7 billion to private companies and financial institutions in developing countries, leveraging private sector solutions, and mobilizing private capital to create a world free of poverty on a liveable planet.
Copyright Business Recorder, 2025
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