KUALA LUMPUR (BLOOMBERG) - Malaysia appeared poised for a new round of political turmoil after opposition leader Anwar Ibrahim claimed to have enough support from lawmakers to form a government.
Prime Minister Muhyiddin Yassin denounced the move on Wednesday (Sept 23) and challenged Datuk Seri Anwar to prove his assertion, while saying his administration remains firmly in control.
Key members of his coalition signed a joint statement to reaffirm support for the Premier, although the leader of the United Malays National Organisation - the largest in the ruling bloc - said "a few" members are supporting Mr Anwar.
Malaysian politics has been wracked with instability this year following the collapse of former Prime Minister Mahathir Mohamad's government in February.
While Tan Sri Muhyiddin eventually cobbled together a coalition and took office in March, he's only managed to command a majority of a handful of votes in Malaysia's 222-member Parliament.
"I urge the people to reject the rash actions of some politicians who deliberately want to disrupt the political stability and the country's economic recovery plan," Mr Muhyiddin said in a speech on Wednesday, in which he announced 10 billion ringgit (S$3.33 billion) of additional stimulus measures.
Mr Anwar, who cut a deal to succeed Dr Mahathir after they shocked Malaysia with an election victory in 2018, has been looking for a way back to power ever since their coalition collapsed.
On Wednesday, he told reporters he amassed "a strong, formidable majority" and would soon have an audience with the King, who serves as head of state.
"We need a strong, stable government to run this country and to save the country," Mr Anwar said in a press conference.
Mr Anwar said he was set to meet the King on Tuesday, before the meeting was postponed as the monarch went for treatment at the National Heart Institute.
He added that he would meet the King after he's recovered. The palace later confirmed the meeting's postponement.
The benchmark FTSE Bursa Malaysia KLCI Index extended declines after Mr Anwar's announcement to slide 0.6 per cent to 1,496.48, the lowest close since Sept 10. The ringgit weakened 0.5 per cent.
"Right now it's a war of words," said Ms Bridget Welsh, honorary research associate at the Asia Research Institute, University of Nottingham Malaysia.
"We're entering into another period of intense negotiation and fluidity in the political situation in Malaysia, and it hasn't really stopped since February."
Mr Muhyiddin is unlikely to easily give up power, Ms Welsh added.
"I think he can learn the lesson from Mahathir: don't resign."
Lawmakers from both sides of the aisle had been calling for early polls recently to settle months of political uncertainty.
Mr Muhyiddin has said he may hold a snap election sooner if his coalition wins the state polls on Saturday in Sabah, where he's currently campaigning.
Mr Anwar wouldn't say how many lawmakers his government would command, but said it was "convincing".
He added that there's no urgency to hold elections.
Investors are growing more accustomed to instability in Malaysia.
While a weak currency could trigger strict capital controls that affect foreign investment, there's not much risk of that happening now, according to Mr Mingze Wu, a currency trader at StoneX Group in Singapore.
"Internal politics in Malaysia remain messy, but are unlikely to affect economic policies," he said.