The Finance Minister, Mr Pranab Mukherjee, has described the Standard & Poor’s (S&P) move to downgrade US’ sovereign credit rating for the first time in its history as a "grave situation", but felt that there was no need to press the panic button as yet.

"We will have to analyse it. Let us examine it. It will require some time. The situation is grave. There is no gain in making off-the-cuff remark now", Mr Mukherjee told reporters here on the sidelines of a meeting.

Earlier in the day, Mr Mukherjee said that the world was going through a difficult phase and that a piecemeal approach would not work. "The world leaders will have to stand up to tackle the situation. It is too early to comment on the effect of US sovereign credit rating downgrade on Indian economy", he said.

No immediate impact likely: SBI chief

Reacting to the S&P move to downgrade US sovereign credit rating, the State Bank of India Chairman, Mr Pratip Chaudhuri said that this will not immediately affect the Indian economy.

"It will be life (business) as usual for us because US dollar would continue to be dominant and only potent currency of world. America’s borrowing costs may go up slightly. But that would not affect us. It is America’s debt downgrade and so American debt will become expensive. America’s interest cost will increase", Mr Chaudhuri said here on Saturday.

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