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This paper presents a new centralized selectivity algorithm for earth-faults in isolated and compensated neutral medium voltage (MV) networks. The algorithm proposes to investigate and utilize the relation between the transient phase current changes in the substation transformer and the transient residual currents for each feeder and section of the network. The transient RMS values of the residual currents for each feeder and section and the transformer phase current changes are calculated, in a constant sliding window of 2.5 ms, using a sampling frequency of 25 kHz. The proposed fault indication levels for each feeder and section will be calculated. The faulted feeder and section can be selected precisely from the higher fault indication levels, without any voltage measurements. The proposed algorithm is valid for isolated and compensated neutral networks. A 20 kV, 251 km medium voltage distribution network is simulated by ATP/EMTP program. Extensive simulations are performed to validate the proposed algorithm.