Egypt's leader signs constitution into law
Egyptian president Mohamed Morsi has signed into law a new Islamist-drafted constitution he says will help end political turmoil and allow him to focus on fixing the fragile economy.
Anxiety about a deepening political and economic crisis has gripped Egypt in past weeks, with many people rushing to buy dollars and withdraw their savings from banks. The Egyptian pound tumbled tpday to its weakest level against the US currency in almost eight years.
The new constitution, which the liberal opposition says betrays Egypt's 2011 revolution by dangerously mixing religion and politics, has polarised the Arab world's
most populous nation and prompted occasionally violent protest on the streets.
The presidency said today that Mr Morsi had formally approved the constitution the previous evening, shortly after results showed that Egyptians had backed it in a referendum.
The text won about 64 per cent of the vote, paving the way for a new parliamentary election in about two months.
The charter states that the principles of sharia, Islamic law, are the main source of legislation and that Islamic authorities will be consulted on sharia - a source of concern to the Christian minority and others.
The referendum result marked yet another electoral victory for the Islamists since veteran autocrat Hosni Mubarak was toppled in 2011, following parliamentary elections last year and the presidential vote that brought Mr Morsi to power this year.
Mr Morsi's government, which has accused opponents of damaging the economy by prolonging political upheaval, now faces the tough task of building a broad consensus as it prepares to impose austerity measures.
The atmosphere of crisis deepened this week after the Standard & Poor's agency downgraded Egypt's long-term credit rating and warned of a possible further cut. The government has imposed currency restrictions to reduce capital flight.
The pound traded as low as 6.1775 against the dollar today, close to its all-time low of 6.26 hit on Oct. 14, 2004, on concerns that the government might devalue or tighten
restrictions on currency movements.
"All customers are rushing to buy dollars after the downgrading," said a dealer at a Cairo-based bank. "We'll have to wait to see how the market will operate with the US dollar, because as you know there is a rush at the moment."
Keen to be seen as decisive, the government is now in talks with business figures, trade unions and other groups to highlight the need for tax increases to resolve the crisis.
Mr Morsi has committed to such austerity measures to receive a $4.8 billion loan from the International Monetary Fund.
However, Al-Mal newspaper quoted Planning Minister Ashraf al-Araby as saying the government would not implement the tax increases until it had completed the dialogue with different parts of society.