PAKISTAN
By Najeeb Naich
The State Bank of Pakistan (SBP) has partnered with the International Finance Corporation (IFC), a private sector arm of the World Bank Group, with the aim of increasing lending in local currency and supporting private sector growth in Pakistan.
Under the ISDA (International Swaps and Derivatives Association) agreement, this partnership will enable IFC to effectively manage currency risks and expand investments in Pakistani rupees. The agreement marks an important step toward removing barriers that hinder lending to key sectors of the Pakistani economy and towards generating employment opportunities across the country.
Governor of the State Bank, Jameel Ahmad, stated: “Promoting private sector growth in Pakistan is essential for the country’s successful and sustainable economic development.”
He added that: “This partnership with IFC aims to increase lending opportunities for the private sector.”
John Gandolfo, Vice President and Treasurer for Treasury and Mobilization at IFC, said: “Currency fluctuations are among the major risks faced by developing economies, and local currency lending has become more important than ever. The World Bank Group gives strategic priority to promoting such financing, which will help stimulate economic growth in Pakistan.”
Exchange rate risks pose serious challenges for companies in developing countries that borrow in stable currencies such as the US dollar while earning revenue in their local currency. Addressing this currency mismatch is essential — not only for reducing risks and maintaining financial resilience of local businesses, but also for supporting broader economic stability.
IFC is committed to using innovative financial instruments and strengthening partnerships to meet the growing need for local currency financing in emerging markets. Through this collaboration with IFC, the State Bank aims to strengthen Pakistan’s economic resilience, promote private sector development, and improve the liquidity of foreign exchange in the country.
