Malaysia's currency gets smoked as the country's opposition leader declares victory in the presidential election

Thomson Reuters

Former Malaysian Prime Minister Mahathir Mohamad waves as he leaves after he was stopped from visiting jailed opposition leader Anwar Ibrahim who is recuperating from a surgery at Cheras Rehabilitation Hospital in Kuala Lumpur

• The Malaysian ringgit fell more than 1% versus the dollar on Wednesday.
• That's after opposition coalition leader Mahathir Mohamad claimed a win in the country's general election.
• Mohamad's claim is contested and early polls showed Prime Minister Najib Razak's ruling coalition in the lead.

The Malaysian ringgit dropped versus the dollar Wednesday after opposition coalition leader Mahathir Mohamad claimed victory in the country's general election.

The ringgit was down 1.38% to 4.0460 versus the dollar.

Reuters reports that 92-year-old Mohamad said his coalition had won enough parliament seats to form the next government. But early polls showed the opposition slightly behind the ruling coalition under Prime Minister Najib Razak. Official results of the election are unclear, and the Election Commission has not yet released verified them.

An opposition win would likely be an upset, especially due to Malaysia's lack of opinion polls. Analysts at Capital Economics said Najib is a "strong favorite to win," noting a flawed opposition campaign and gerrymandering in the ruling party's favor.

But the analysts noted the ruling coalition comes with problems of its own.

"With Najib promising to almost double cash handouts to low-income households and Mahathir pledging to scrap the Goods and Services Tax, the budget deficit is likely to widen this year," they said.

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