International Monetary Fund chief Dominique Strauss-Kahn has been cleared of wrongdoing following an inquiry into his affair with a female subordinate.

The agency's executive board issued a statement Saturday saying it has concluded Strauss-Kahn's relationship with former IMF economist Piroska Nagy was consensual and did not involve any sexual harassment, favoritism or abuse of power.

However, the board did note that his actions were "regrettable and reflected a serious error of judgment."

In a statement late Saturday Strauss-Kahn repeated his apology for the incident to the IMF board, the fund's staff and his family, and the individual involved in the incident.  He said he regrets his error of judgment, and commits to upholding the high standards expected of him as managing director.

The fund had hired an outside Washington law firm to investigate whether Strauss-Kahn broke any laws by allegedly showing favoritism to Nagy.

In a memo last week, the IMF chief admitted he made an error in judgment but said he firmly believed he did not abuse his power.

The former French finance minister's wife, popular French television personality Anne Sinclair, has dismissed the affair as a "one night stand."