Malaysia premier takes finance job

Mr Mahathir has been finance minister once before

Malaysian Prime Minister Mahathir Mohamad has himself filled the power vacuum that was left when the country's finance minister Daim Zainuddin resigned from the post during the weekend.

Shares slipped due to political uncertainty

"This morning, I have written to the secretary-general of the ministry of finance that I am now acting as minister of finance," Mr Mahathir said according to the Malaysian national news agency, Bernama.

Mr Mahathir will also take charge of the body that was created to sort out Malaysia's economy after Asia was severely beaten by a financial crisis in 1997.

As head of the body, called the National Economic Action Council, the prime minister will take on the duties of special functions minister.

No surprise

The move had been expected by experts within the financial world - not least because Mr Mahathir has appointed himself to the post once before.

In 1998, Mr Mahathir sacked his deputy Anwar Ibrahim who is currently serving a prison sentence for corruption and sodomy, a crime in Muslim Malaysia.

He then held the finance minister post for several months before he hired Mr Daim.

New leader

Mr Daim's resignation from one of the most senior positions in Mahathir's government failed to silence the rumour mill which suggests that he had fallen out with the prime minister.

The resignation came as75-year-old Mr Mahathir's potential successors were jostling for power, just two weeks before the annual general assembly of the prime minister's United Malays National Organisation, or UMNO.

Mr Daim has also resigned as UMNO treasurer, said Mr Mahathir.

Shares slip

Analysts said the changes at the finance ministry would have little effect on Malaysia's economic policy or on its fixed exchange rate regime.

Yet, share prices slipped on the Kuala Lumpur stock exchange as investors focused on who would eventually be appointed finance minister.

Whoever is appointed to the number two job in Malaysia may eventually be a likely successor to Mr Mahathir.