John Lipsky, acting managing director of the International Monetary Fund, told CNBC Monday he will be retiring Aug. 31 when his term as first deputy ends.
"I indicated [to President Obama] I would not be seeking a new term," he said. "August 31 seems an awfully long way away right now. I'm concentrating on the issues right at hand for this institution."
One of those will not be picking a successor to disgraced managing director Dominique Strauss-Kahn, who resigned after being arrested for attempted rape in a New York hotel.
Lipsky, who said he has not heard from his former boss since his arrest but for a staff memo detailing why he had resigned from the IMF, said he won't be involved in picking a new managing director.
"The choice is made by the executive board representing 187 countries," he said. "The board met and agreed on a process that is open, transparent and merit-based. I am confident...the members will chose a leader who is qualified."
The front runner is France's finance minister Christine Lagarde, who Lipsky called "a very talented and experienced leader. She’s done an excellent job as finance minister and she’d be an excellent managing director."
However, there are other candidates and "I'm pleased to say they all seem to be excellent names," he said.
Lipsky and the IMF staff, however, have been actively involved in the European economic crisis, particularly Ireland, Greece and Portugal. He said so far these and other troubled countries including Spain and Italy have made structural changes and thus avoided debt restructuring.
"What is being portrayed as bad news is, in fact, good news," he said. "With good policies in place, and with the support of the European partners and the fund, the peripheral countries can make improvements" while reducing the risk of contagion. "This is going to take concerted effort by the governments involved."