Christine Lagarde made the remarks on Thursday in an interview with the German daily Frankfurter Allgemeine Zeitung as negotiations are being held between Greece and its lenders to reach a deal unblocking bailout funds which the country desperately needs.
"A Greek exit is a possibility," Lagarde told the newspaper, adding that such a move would not be "a walk in the park" for the single currency area, but would "probably not be an end to the euro."
She further rejected comments by Greek authorities that a deal between Athens and its international creditors to unlock bailout funds for Athens is almost certain.
"It is very unlikely that we`ll reach a comprehensive solution in the coming days," she said.
Greek Economy Minister Giorgos Stathakis said on Wednesday that a deal between Athens and its lenders "is very close.”
The IMF chief also stated that there is a long way for Greece to secure the deal, adding that without a clear reform in the county`s economy there will be no funds for Athens.
"We have rules. We have principles. There will be no half-baked program review," Lagarde said.
If the Mediterranean country secures the deal, it would receive as much as 7.2 billion euros (USD 7.8 billion) in remaining bailout money that will help Greece avoid defaulting on its foreign debts. Struggling to avoid the large-looming default, Greece has paid parts of its debt by cutting the reserve funds from some state-run enterprises. The creditors, however, insist on more reforms in the country’s economy.
In 2010 and 2012, Greece received two bailouts worth a total of €240 billion (USD 272 billion) from the so-called troika of international lenders - the IMF, the European Commission, and the European Central Bank - following the 2009 economic crisis.
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