International Monetary Fund chief Christine Lagarde has resigned from her post effective from 12 September.
Ms Lagarde, head of the global lending organisation since 2011, announced on Tuesday she had submitted her resignation, saying she had “more clarity” about her nomination to be the next head of the European Central Bank.
Her resignation now, which cuts short a second five-year term due to end in July 2021, clears the way for the IMF to begin its search for a successor.
Ms Lagarde, the first woman to lead the IMF, said in a statement: “With greater clarity now on the process for my nomination as ECB president and the time it will take, I have made this decision in the best interest of the fund.”
Her resignation comes two weeks after her nomination for the ECB’s top job.
If approved, Ms Lagarde would take over as ECB president from Mario Draghi on 31 October.
Ms Lagarde‘s resignation comes on the eve of a meeting of the Group of Seven finance ministers in Chantilly, France.
US treasury secretary Steven Mnuchin will meet Bank of England governor Mark Carney, a contender to replace Ms Lagarde, on Wednesday evening on the fringes of the meeting.
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White House economic adviser Larry Kudlow last week declined to comment when asked about Mr Carney as a possible replacement for Ms Lagarde.
However, speculation is pointing to another European as being likely to take over the role, as has been IMF tradition, while the World Bank has always been led by an American – since the institutions were created at the end of the Second World War.
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Other names in the frame include Bank of Finland governor Olli Rehn, Germany’s Bundesbank president Jens Weidmann, and ECB executive board member Benoit Coeure.
Kristalina Georgieva, current World Bank chief executive and Bulgarian national, has been seen as having an outside chance, according to IMF sources.
A former French finance minister, Ms Lagarde was known as a tough negotiator among policymakers, who advocated for the benefits of trade, global growth that aids the poor and middle classes, and the empowerment of women.