Collaboration to unlock funding for critical sectors and create jobs nationwide
The State Bank of Pakistan (SBP) has signed an agreement with the International Finance Corporation to strengthen local currency financing and support private sector growth in Pakistan. — Photo courtesy of SBP/X
The State Bank of Pakistan has partnered with the International Finance Corporation (IFC), the private sector arm of the World Bank Group, to expand local currency financing and support private sector growth in Pakistan.
The agreement, signed under the International Swaps and Derivatives Association (ISDA) framework, will enable the International Finance Corporation (IFC) to manage currency risks more effectively and increase its investments in Pakistani rupees, according to a press release from the State Bank of Pakistan (SBP).
2/2 #SBP has partnered with the International Finance Corporation to expand local currency financing and support private sector growth in Pakistan. This will increase the financing opportunities for the private sector and create jobs throughout the country. pic.twitter.com/KdnWUBJDDf
— SBP (@StateBank_Pak) 20 October 2025
SBP Governor Jameel Ahmad said: “Promoting the growth of the private sector in Pakistan is paramount to the successful, sustainable economic development of the country. The partnership with IFC aims to improve financing opportunities for the private sector” (SBP). He added that the collaboration would help unlock funding for critical sectors and create jobs across the country.
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John Gandolfo, IFC Vice President and Treasurer, Treasury & Mobilization, said: “With currency volatility posing significant risks to developing economies, access to local currency financing has never been more important. Promoting this type of financing is a strategic priority for the World Bank Group and a catalyst for economic growth in Pakistan” (SBP).
The SBP noted that exchange rate risks challenge companies that borrow in hard currencies such as the US dollar while earning income in local currencies. Addressing this imbalance is critical to strengthening the financial resilience of local businesses and supporting broader economic stability (SBP).
Through the partnership, SBP aims to strengthen economic resilience, improve foreign exchange liquidity and promote private sector development.
The development came as Pakistan sought to stabilize its macroeconomic indicators amid IMF discussions over its loan program and a potential $1.2 billion disbursement. The government also aimed to attract private sector investment and expand infrastructure financing, priorities highlighted during Finance Minister Muhammad Aurangzeb’s six-day official visit to Washington, DC, for the IMF-World Bank annual meetings.
During the visit, Aurangzeb met senior officials from IFC and Islamic Development Bank (IsDB), and emphasized the importance of strengthening private sector partnerships and investments under the World Bank Group framework.
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These engagements were part of broader reform and stabilization efforts, including IMF program reviews and measures to increase Pakistan’s economic resilience and foreign exchange liquidity.
The SBP-IFC partnership is in line with these efforts, supporting the development of the private sector, mitigating currency risk and enabling financing of critical sectors.
The State Bank of Pakistan is the country’s central bank, responsible for price stability, stability of the financial system and support for the development and utilization of Pakistan’s productive resources (SBP).
On the other hand, IFC is the largest global development institution with a focus on the private sector in emerging markets. It operates in over 100 countries and leverages capital, expertise and partnerships to create opportunities in developing countries and promote sustainable growth (SBP).
