The Finance Minister Mr. Pranab Mukherjee has said that the new monetary policy announced by the Reserve Bank of India on Tuesday is expected to further ease inflation which is already going down. In a statement after the announcement of the new policy, Mr. Mukherjee said that it will also keep on track the growth process. While expressing happiness over the new policy, Mr. Mukherjee said that the bank has not only raised policy rates but also narrowed down the spread between the repo and reversed repo rates. RBI has hiked re-purchase option and reverse re-purchase option rates to address the growing concern of high inflation. The Repo rate is hiked by a quarter per cent raising it to 5.75 per cent and the Reverse Repo rate by half a per cent, taking it to 4.50 per cent. Other policy rates have been kept unchanged by the Bank. Repo rate, often referred to as the short term lending rate, is the interest the apex bank charges on borrowings by commercial banks. CRR and bank rate kept unchanged at 6 per cent, Hike in policy rates with immediate effect. Growth has been projected to be at 8.5 per cent while the policy pegs inflation at 6 per cent by March end, to start a new mechanism of mid-quarter review.