Mahathir Mohamad sworn in as country’s seventh Prime Minister

Malaysia’s former authoritarian leader Mahathir Mohamad, who in a stunning political comeback led opposition parties to their first election victory in six decades, has been sworn in before the country’s King as prime minister.

The ceremony at the official state palace in Kuala Lumpur ended a day of uncertainty during which rumours swirled that the National Front, Malaysia’s ruling party for 60 years, would try to stay in power.

Dr Mahathir was dressed in a traditional black “baju melayu” tunic and sarong, with an Islamic cap on his head.

Hundreds of Malaysians lined the road leading to the palace, waving party flags and cheering the 92-year-old Dr Mahathir.

At a press conference after being sworn in, Dr Mahathir reassured the financial community and said he would prioritise stabilising the economy and returning billions of dollars lost in a corruption scandal at state fund 1Malaysia Development Berhad (1MDB).

“We believe that we can get most of the 1MDB money back … we have to increase the confidence of investors in the administration,” he told reporters.

Malaysian markets were closed and will reopen only on Monday, but overseas investors were nervous about the ouster of Mr Najib, who has been in power for nearly a decade.

The ringgit lost four per cent in offshore trading, while an overseas Malaysian equity fund showed a 6 per cent drop in share values before partly rebounding.

“This upset ranks up there with Brexit and the Trump election,” said Aninda Mitra, a senior sovereign analyst at BNY Mellon Investment Management.

“I believe the ringgit will come under pressure as policy continuity will come under a cloud.”

As the election result became clear on Thursday, cementing a historic change of government, people stood on roadsides waving the white, blue and red flag of the opposition alliance, while cars tooted their horns.

“We need to have this government today without delay,” Dr Mahathir said before the ceremony.

“There is a lot of work to be done. You know the mess the country is in and we need to attend to this mess as soon as possible and that means today.”

Dr Mahathir ruled Malaysia with an iron fist from 1981 to 2003 and now, with a second innings at the age of 92, is the oldest elected leader in the world.

His alliance of four parties trounced the Barisan Nasional (BN) coalition of now former prime minister Najib Razak, who was once Dr Mahathir’s protege but became his most bitter rival.

Official results showed that Dr Mahathir’s coalition won 113 seats, one more than the number required to rule.