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The Finance Ministry on Monday is hoping that that recent downgrade of the US will bring down headline inflation. The rating agency Standard and Poor’s lowered the rating of US on Thursday which has brought down the prices of major commodities such as crude.
"It can have a dampening effect on inflation because we all have been worried about commodity prices. But we will have to watch how long this will happen," Chief Economic Advisor, Mr Kaushik Basu, told reporters.
The 52-week average of the rate of inflation for primary articles has been recorded as 15.38 per cent. While for June, the overall rate of monthly inflation stood at 9.44 per cent.
Now, after the S&P rating, the international price of Brent crude has come down to $107 per barrel while crude at NYMEX is hovering around $85. Experts expect more softening in the coming days.
However, Mr Basu added a note of caution. He said, "A part of the international prices has to deal with buoyancy of the Indian Economy. There is softening of global prices. It might help in softening the prices here."
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