The managing director of the International Monetary Fund (IMF) and the will known face of this international financial body Christine Lagarde will be stepping down from her post, the IMF chief has announced.

This announcement comes before a decision is to be taken about nominating her as the chief of the European Central Bank (ECB).

She would leave the IMF on 12 September, Lagarde said.

“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,” she said. “The executive board will now be taking the necessary steps to move forward with the process for selecting a new managing director,” she added.

Lagarde, a former cabinet minister of France, has headed the IMF since 2011.

If Lagarde is nominated to head the ECB by the European Council, it would also be the first that the European central bank would be headed by woman and one who would be responsible for setting monetary policies for the entire eurozone and the European currency euro.

Lagarde, 63, had started off its her career as a lawyer and later stepped into politics. She is considered to be the “rock star” of international finance by many in the industry. Before she was elected as the first female boss of the IMF – replacing Dominique Strauss Khan, Lagarde had gathered experience of serving in multiple ministerial posts under Nicolas Sarközy.

The question now is who would be the next chief of the IMF. Analysts expect that various parties and investors of the IMF would start filing their nominations of their choice soon. However, many are also worried about that the selection would once again bring back an old sore understanding in the selection of chiefs of the IMF and the World Bank.

Tradition established after an understanding after the Second World War mandates that the head of the IMF would be from Europe while the World Bank would be headed by a nominee of the United States. This tradition had been continued with the appointment of Christine Lagarde.

The news of the agreement between Europe and the US came to the forefront earlier this year following the sudden opening for the position of the head of the World Bank. US President Donald Trump’s nominee was chosen as the World Bank chief. However over the years, this practice has been challenged.

Lagarde had to face a contest from the Mexican central banker Agustin Carstens during her first selection as the chief of the IMF. Prior to that, there had been a number of non-European nominations.

Laragde has been voted to be among the 10 most powerful women globally on multiple occasions and has been credited with the enhancing of the credibility of the IMF after its role in the 2010 bailout of Greece. She was also instrumental in implementing the biggest bailout program undertaken by the IMF – the $57 billion deal for Argentina last year. Many analysts believe that the bailout helped Argentina to stop a crash of its economy.

(Adapted from BBC.com)

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