US downgrade a grave concern: FM

New Delhi, Aug 6 (PTI) Indian Finance Minister Pranab
Mukherjee on Saturday described the downgrading of the US
government by credit rating agency as a "grave situation" and
said it has to be analysed.
"We will have to analyse it. It will require some time.
Situation is grave and there is no gain in making off-the-cuff
remarks," he told reporters on the sidelines of a function
here.
In an unprecedented move, Standard & Poor's downgraded
the US government’s 'AAA' sovereign credit rating - a
development which raises concerns that investors will lose
confidence in its economy.
This comes a day after a bloodbath was witnessed in the
global markets including those in Asia. In India, the BSE
sensex plunged more than 700 points before recovering
partially with investors selling across the board.
Seeking to allay domestic fears, Mukherjee had on Friday
said that the market fall was due to external factors.
"This is nothing domestic. It is substantially due to
external factors. Stock markets fell due to global factors
like weak recovery in US and spread of debt burden in
Eurozone. Current volatility is temporary," he had said.
Market regulator Sebi said it was watching the situation
closely. "... And our belief is that everything is perfect and
right in our market. There is nothing for the people to
worry," said Sebi Chairman U K Sinha.
"Our risk management system is working perfectly. All the
settlements are taking place," he added.

The Reserve Bank of India, however, had said that India
will have to learn to live with volatility in the global
economy.
The US's downgrade, the S&P said, reflects its opinion
that the fiscal consolidation plan which Congress and the
administration recently agreed to "falls short of what, in our
view, would be necessary to stabilize the government's
medium-term debt dynamics."
Other prominent credit rating agencies - Moody's
Investors Service and Fitch Ratings - affirmed their AAA
credit ratings even as President Barack Obama signed a bill
that ended the debt-ceiling impasse that pushed the Treasury
to the edge of default.
Moody's and Fitch also said that downgrades were possible
if lawmakers fail to enact debt reduction measures and the
economy weak.