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CNBC Exclusive: CNBC Excerpts: IMF Managing Director Christine Lagarde Speaks with CNBC’s Steve Sedgwick on “Squawk Box” Today

WHEN: Today, Friday, June 17th

WHERE: CNBC's "Squawk Box"

Following are excerpts from the unofficial transcript of a CNBC EXCLUSIVE interview with IMF Managing Director Christine Lagarde and CNBC's Steve Sedgwick on "Squawk Box" (M-F, 6AM-9AM ET) today, Friday, June 17th. Following is a link to the article with video on CNBC.com: http://www.cnbc.com/2016/06/17/there-are-downside-risks-to-the-uk-voting-to-withdraw-from-the-eu-lagarde.html

All references must be sourced to CNBC.

LAGARDE ON UNEMPLOYMENT

THE U.K. HAS PROBABLY ONE OF THE LOWEST UNEMPLOYMENT RATE IN THE WHOLE OF THE EUROPEAN UNION. SO TO ARGUE THAT IT IS BECAUSE IT IS PART OF THE EUROPEAN UNION THAT THE UNEMPLOYMENT RATE IS WHAT IT IS, IT IS NOT THE CASE. AND YOU KNOW, I REMEMBER DECADES AGO WHEN THE UNEMPLOYMENT RATE IN THAT COUNTRY WAS PRETTY HIGH. BUT, YOU KNOW, BE THAT AS IT MAY, PEOPLE WILL HAVE TO MAKE UP THEIR MIND AND VOTERS WILL HAVE TO DECIDE FOR THEMSELVES WHAT THEY WANT AND WHAT THEY NEED TO DO. BUT I THINK MY DUTY AS HEAD OF THE IMF IS TO REPORT BACK – NOT JUST TO THE U.K., BUT TO ALL THOSE INTERESTED AND INVOLVED WHAT THE OUTCOME IS AND WHAT THE BENEFITS HAVE BEEN.

LAGARDE ON BREXIT FALLOUT

IT'S GOING TO COST. IT'S GOING TO BE NEGATIVE FOR INCOME PURPOSES. IT IS GOING TO BE REDUCED TRADE, MOST LIKELY, AS A RESULT OF UNCERTAINTY. I MEAN, THOSE ARE BLATANT FACTS.

LAGARDE ON FREE TRADE

IT HAS DEMONSTRATED ENORMOUS BENEFITS. WHEN YOU LOOK AT THE HUNDRED MILLIONS OF PEOPLE WHO HAVE BEEN LIFTED OUT OF POVERTY, OF HUNGER, MEANING BEING, YOU KNOW, HUNGRY, WANTING TO EAT, FREE TRADE HAS BEEN A CRITICAL AGENT OF THAT. SO WHAT IS BETTER THAN FREE TRADE AS FRAMED IN THE GOVERNANCE THAT WE HAVE – TO LIFT PEOPLE OUT OF POVERTY, TO IMPROVE COMPETITIVENESS, TO PUSH INVESTMENT, TO MAKE SURE THAT TALENTS CAN ACTUALLY BE EXPANDED ON A BROADER BASIS THAN JUST IN A VERY DOMESTIC AND EXCLUSIVE CIRCLE.

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