Collaborating 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 increase local currency financing and support private sector growth in Pakistan.
The agreement, signed under the International Swaps and Derivatives Association (ISDA), will enable the International Finance Corporation (IFC) to more effectively manage foreign exchange risks and increase its investments in Pakistani rupees, according to a press release from the State Bank of Pakistan (SBP).
2/2 #SBP partnered with the International Finance Corporation to increase local currency financing and support private sector growth in Pakistan. This will improve financing opportunities for the private sector and create jobs across the country. pic.twitter.com/KdnWUBJDDf
– SBP (@StateBank_Pak) October 20, 2025
SBP Governor Jameel Ahmad said: “Promoting private sector growth in Pakistan is paramount for the successful and sustainable economic development of the country. The partnership with IFC aims to enhance 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 and 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 foreign exchange risks put a strain on companies that borrow in hard currencies such as the US dollar while earning revenue in local currencies. Addressing this mismatch is critical to strengthening the financial resilience of local businesses and supporting broader economic stability (BES).
Through this partnership, the 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 on its loan program and a potential disbursement of $1.2 billion. The government also aimed to attract private sector investment and increase infrastructure financing, priorities highlighted during Finance Minister Muhammad Aurangzeb’s six-day official visit to Washington, DC, for the annual meetings of the IMF and World Bank.
During the visit, Aurangzeb met senior officials of the IFC and the Islamic Development Bank (IDB), emphasizing the importance of strengthening private sector partnerships and investments under the World Bank Group.
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These commitments were part of broader reform and stabilization efforts, including reviews of IMF programs and measures to strengthen Pakistan’s economic resilience and foreign exchange liquidity.
The SBP-IFC partnership aligns with these efforts, supporting private sector development, mitigating foreign exchange risk and enabling financing of critical sectors.
The State Bank of Pakistan is the central bank of the country, responsible for price stability, stability of the financial system and supporting the development and utilization of Pakistan’s productive resources (SBP).
On the other hand, IFC is the largest global development institution focused on the private sector in emerging markets. Operating in more than 100 countries, it leverages capital, expertise and partnerships to create opportunities in developing countries and promote sustainable growth (SBP).
