"If this declining trend continues, I do hope it will have a moderating influence on the price front," Mukherjee told reporters here.
His comments came after food inflation fell to a three-week low of 7.58 per cent for the week ended July 9 on the back of cheaper pulse prices and a high base last year.
Food inflation, as measured by the Wholesale Price Index (WPI) stood at 8.31 per cent in the previous week. It was as high as 19.52 per cent in the corresponding week of July, 2010, suggesting a high base.
During the week under review, prices of pulses went down by 7.67 per cent on a year-on-year basis. However, prices of other food items continued to rise.
Inflation of overall primary articles stood at 11.13 per cent during the week under review, down from 11.58 per cent in the previous week. Non-food articles reported an inflation of 15.50 per cent for the week ended July 9, compared to 15.20 per cent in the previous week.
Mukherjee said the domestic situation on the price front was improving, though concerns remain over international issues.
"The trend is encouraging so far as the domestic sector is concerned. But we do not have total control over international issues, international commodity prices, fuel prices, and the influence of the external inflationary pressure could have some adverse impact on our domestic front," he said.
The Government had yesterday said that inflation will continue to remain high till December on account of "seasonal effects and upward movement in crude oil, manufactured and administered fuel prices...".
Headline inflation stood at 9.44 per cent in June. It has remained consistently above the 9 per cent mark since December, 2010.