Karachi / Washington:The State Bank of Pakistan (SBP) has signed a landmark agreement with the International Finance Corporation (IFC) a member of the World Bank Group to enhance local currency financing and foster private sector growth in Pakistan, marking a major stride toward economic stability and resilience.
According to an SBP on Monday, the agreement, signed under the International Swaps and Derivatives Association (ISDA) framework, will allow the IFC to better manage currency risks and increase investments in Pakistani rupees. The central bank said the collaboration aims to unlock financing for key sectors, stimulate job creation, and strengthen the country’s overall financial ecosystem.
SBP Governor Jameel Ahmad termed private sector growth as paramount to successful and sustainable economic development, adding that the partnership with IFC will open new financing opportunities and help businesses withstand exchange rate fluctuations.
Echoing this sentiment, John Gandolfo, IFC Vice President and Treasurer for Treasury and Mobilisation, noted that access to local currency financing has never been more important, especially for developing economies facing currency volatility. He reaffirmed that supporting such initiatives remains a strategic priority for the World Bank Group and a catalyst for Pakistan’s economic growth.
The SBP statement highlighted that exchange rate risks continue to challenge companies that borrow in foreign currencies like the U.S. dollar but earn revenue in local currency. The new arrangement will mitigate such risks, improve foreign exchange liquidity, and boost investor confidence in Pakistan’s financial markets.
The development follows Finance Minister Muhammad Aurangzeb’s visit to Washington, where he met senior officials of the IFC and Islamic Development Bank (IsDB) to discuss private sector investment and infrastructure financing. During meetings with Riccardo Puliti, IFC Regional Vice President, the minister emphasized Pakistan’s improving macroeconomic indicators and welcomed IFC’s decision to open a regional office in Islamabad calling it a significant step toward deepening collaboration and accelerating projects like Reko Diq under the 10-year Country Partnership Framework.