SBP, IFC Partner to Boost Local Currency Lending in Pakistan

The State Bank of Pakistan (SBP) has joined forces with the International Finance Corporation (IFC) to expand local currency lending in Pakistan. The goal is to help private businesses grow and reduce financial risks.
Through an International Swaps and Derivatives Association (ISDA) agreement, IFC can now manage currency risks more effectively. As a result, it plans to boost investments in Pakistani rupees, SBP confirmed in its statement.
SBP Governor Jameel Ahmad called the agreement a key step in unlocking funds for critical sectors. He said it would also create more job opportunities and strengthen the country’s economy.

Private Sector Growth

“Promoting private sector growth is vital for Pakistan’s sustainable development,” said Ahmad. “Our partnership with IFC aims to expand financing opportunities for local businesses.”
John Gandolfo, IFC Vice President and Treasurer, said currency fluctuations remain a big challenge for developing economies. “Access to local currency financing is more important than ever,” he added. “This initiative supports stability and growth for Pakistan’s economy.”
According to SBP, many companies in emerging markets face challenges when they borrow in dollars but earn revenue in local currencies. This mismatch can lead to heavy losses when exchange rates fluctuate. Therefore, addressing it is essential for financial stability.
The SBP emphasized that this partnership will make it easier for businesses to handle such risks and remain strong. In addition, the agreement will help attract more investment and improve financial resilience.
IFC reaffirmed its long-term commitment to innovative financial solutions. It said it would continue to build partnerships that support local financing needs in developing markets.
“Through this partnership, SBP and IFC will enhance resilience, promote private sector growth, and strengthen Pakistan’s foreign exchange position,” the central bank concluded.