The headline inflation eased sharply in the month of August, falling to 5.3% as against 5.6% recorded in July 2021. The August number also beat market expectations by a wide margin (market consensus at 5.6%). The easing of the CPI inflation was largely on account of decline in food inflation. On y-o-y basis, food and beverages inflation softened by 66 bps to 3.80% from the July print of 4.46%.