Malaysia’s Prime Minister Muhyiddin Yassin and his cabinet submitted their resignation to the king on Monday, according to a statement by the palace.

The resignation comes as Malaysia grapples with its worst Covid-19 outbreak and the economy hit from multiple rounds of lockdowns.

Muhyiddin will remain as a “caretaker” prime minister until a new leader is appointed, said the palace’s statement. The palace added in the Malay-language statement — which CNBC translated — that the king thought an election is “not the best option” now, given the Covid outbreak.

The Malaysian ringgit was at its weakest in more than a year against the U.S. dollar on Monday.

Before the release of the palace’s statement, Malaysia’s Minister of Science, Technology and Innovation Khairy Jamaluddin said in a post on his verified Instagram account that the cabinet has submitted its resignation to the king.

Khairy’s post followed local media reports that Muhyiddin would step down from the top job after losing majority support in parliament due to infighting among his political coalition.

Losing parliamentary majority

In a televised address, Muhyiddin said he resigned because he has lost majority support in parliament. He added that he will not work with “kleptocrats” and interfere with the country’s judiciary process to remain in power.

Muhyiddin said he hopes a new government can be formed soon to ensure that the economic recovery and Covid vaccine rollout continue smoothly.

Muhyiddin, who came to power in March last year, had governed with a razor-thin majority in the 222-seat parliament.

In the last few weeks, he faced increasing pressure to step down after some lawmakers from the United Malays National Organisation or UMNO — the largest party in the ruling coalition — withdrew their support. Some UMNO politicians, including former Prime Minister Najib Razak, face charges of corruption and money laundering.

Muhyiddin claimed earlier this month that he still commanded majority support in parliament. He said he would prove the legitimacy of his leadership through a confidence vote when parliament reconvenes in September.

But in a speech last Friday, Muhyiddin acknowledged for the first time that he did not have a majority. He attempted to woo the opposition by promising political and electoral reforms — such as limiting the prime minister’s tenure to two five-year terms — in exchange for support on the confidence vote.

The offer was rejected by the opposition.

Malaysia plunged into political turmoil after the sudden resignation of former Prime Minister Mahathir Mohamad in February last year. That paved the way for Muhyiddin to form a government by cobbling together a fragile coalition.

Worsening Covid outbreak

Malaysia’s daily new Covid cases per million people is one of the highest globally, according to data compiled by online repository Our World in Data.

On a seven-day moving average basis, the Southeast Asian country recorded 620.14 confirmed Covid cases per million people on Saturday — the sixth highest globally and the top in Asia, the data showed.

But authorities have accelerated the pace of vaccinations in recent weeks despite the political tussle. Nearly one-third of Malaysia’s 32 million people has completed their vaccinations as of Sunday, official data showed.

Muhyiddin said Monday that his cabinet has ordered more than 87 million shots of Covid vaccines, which are “enough” to inoculate the population by the end of October.

The health ministry projected that daily infections would remain high and reach a peak in mid-September, before falling to around 1,000 cases per day in October.