Malaysian PM seen at national palace amid expectation of resignation

KUALA LUMPUR, Aug 16 (Reuters) - Malaysian Prime Minister Muhyiddin Yassin was seen entering the national palace on Monday amid reports he will tender his resignation to the king, after months of political turmoil that resulted in him losing his majority.

Muhyiddin's hand has weakened after months of infighting in his coalition and is expected to step down on Monday, according to media reports. Muhyiddin's office did not respond to Reuters requests for comment on Monday.

If confirmed, Muhyiddin's resignation would end a tumultuous 17 months in office, but could also hamper Malaysia's efforts to reboot a pandemic-stricken economy and curb a resurgence in COVID-19 cases, as there is no obvious successor.

Malaysia's ringgit currency fell to a one-year low and the stock market (.KLSE) slipped.

It was not immediately clear who could form the next government, given no one has a clear majority in parliament, or whether elections could be held during the pandemic.

Malaysia's infections and fatality rates per million people are the highest in Southeast Asia.

The decision is likely to be thrust into the hands of constitutional monarch King Al-Sultan Abdullah, who can appoint a prime minister from among elected lawmakers based on who he thinks is most likely to command a majority.

Muhyiddin, who has for weeks defied calls to quit, informed party members that he will submit his resignation to the king on Monday, according to Mohd Redzuan Md Yusof, a minister in the prime minister's department, news portal Malaysiakini reported on Sunday.

The minister did not respond to a request for comment.

The prime minister convened a special cabinet meeting on Monday morning, state news agency Bernama reported. Reuters journalists saw Muhyiddin arrive at the national palace.

His resignation could return the premiership to the United Malays National Organisation (UMNO), Malaysia's 'grand old party', which was voted out in a 2018 election after being tainted by corruption allegations.

The top two contenders for the premiership or interim prime minister's post include deputy prime minister Ismail Sabri Yaakob and veteran lawmaker Tengku Razaleigh Hamzah, both from UMNO.

Muhyiddin's grip on power has been precarious since he took office in March 2020 with a slim majority. Pressure on him mounted recently after some UMNO lawmakers - the largest bloc in the ruling alliance - withdrew support.

Muhyiddin has said the recent crisis was brought on by his refusal to meet demands including the dropping of corruption charges against some individuals.

UMNO politicians, including former premier Najib Razak and party president Ahmad Zahid Hamidi, are facing graft charges. They have denied wrongdoing and were among those who withdrew support for Muhyiddin this month.

Additional reporting by Rozanna Latiff, Liz Lee and Ebrahim Harris Editing by Ed Davies and Gerry Doyle

Our Standards: The Thomson Reuters Trust Principles.