Pakistan teams up with IFC to boost rupee-based financing for businesses

ISLAMABAD: The State Bank of Pakistan (SBP) has entered into a partnership with the International Finance Corporation (IFC), a member of the World Bank Group, to expand local currency financing and support private sector growth in Pakistan.

Under an agreement with the International Swaps and Derivatives Association (ISDA), the collaboration will allow IFC to manage currency risks more effectively and increase its investments in Pakistani rupees. The central bank said the initiative would help unlock funding for key sectors of the economy and create employment opportunities nationwide.

Strengthening private sector development

SBP Governor Jameel Ahmad described the agreement as an important step toward sustainable economic development. “Promoting private sector growth in Pakistan is paramount to the country’s long-term progress,” he said, adding that the partnership with IFC would open new financing avenues for businesses.

John Gandolfo, IFC Vice President and Treasurer for Treasury and Mobilization, noted that currency volatility remains a serious concern for developing economies. “Access to local currency financing has never been more important,” he said. “Encouraging this form of financing is a strategic priority for the World Bank Group and a key driver of economic growth in Pakistan.”

Tackling exchange rate challenges

The SBP highlighted that companies in developing markets often face significant risks when borrowing in foreign currencies such as the US dollar while earning in local currency. This mismatch, it said, can strain financial resilience and limit long-term stability.

“Addressing this challenge is essential not only to help local businesses manage risks but also to support broader economic stability,” the central bank said.

Boosting resilience through innovation

IFC reaffirmed its commitment to using innovative financial tools and partnerships to meet the rising demand for local currency financing in emerging economies.

Through this new agreement, the SBP expects to strengthen Pakistan’s economic resilience, enhance private sector participation and improve foreign exchange liquidity in the market.

The partnership signals a shift towards more stable, locally driven growth, offering businesses the financial confidence needed to expand and invest in Pakistan’s future.