New Delhi, Aug 6 (IANS): Finance Minister Pranab Mukherjee Saturday expressed concern over downgrading of the US government credit rating and said the situation will be monitored closely.

"The situation is grave. We will have to analyse it and it will take sometime to do that," Mukherjee told reporters on the sidelines of an industry event here.

The reactions came after international credit rating agency Standard & Poor's downgraded the top notch AAA credit rating of the US government's ability to pay back its creditors and investors to AA+.

The move has sent shockwaves across the financial world.

The US treasury bond has traditionally been considered as one of the safest avenues for investments. World over, governments and central banks have invested heavily in these treasury bonds.

On Friday, Mukherjee tried to calm the domestic investors' sentiment by blaming the volatility in the market on external factors.

"Stock markets fell due to global factors like weak recovery in US and spread of debt burden in Eurozone," Mukherjee said.

"Current volatility is temporary," he added.