The foreign exchange reserves fell for a third consecutive week as of December 20, data from the Reserve Bank of India said on Friday.

India’s foreign exchange reserves stood at a more-than-seven-month low of $644.39 billion. As per the RBI data, the reserves declined by $8.5 billion in the reporting week, logging their biggest weekly fall in over a month. They had declined by a total of $5.2 billion in the prior two weeks.

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Changes in foreign currency assets are caused by the central bank’s intervention in the forex market as well as the appreciation or depreciation of foreign assets held in the reserves. The RBI intervenes on both sides of the forex market to curb undue volatility in the rupee.

RBI further said that India’s current account deficit moderated slightly from a year earlier in the July-September quarter.The current account deficit stood at $11.2 billion, or 1.2 per cent of GDP in the reporting quarter, compared with a revised deficit of $11.3 billion or 1.3 per cent of GDP in the same quarter a year ago.The deficit stood at a $9.7 billion or 1.1 per centof GDP in the preceding quarter.

Recently, the Finance Ministry had said that the government will continue its focus on improving quality spending, strengthening the social security net and bring down the fiscal deficit to 4.5 per cent of the GDP in FY26. The ministry has released statements on the half yearly review of the trends in receipts and expenditure and deviation in meeting the obligations of the government under the Fiscal Responsibility and Budget Management Act, 2003.

It said the Union government is committed to pursuing the glide path of fiscal consolidation as announced in the Budget for FY 2021-22 and to attain a level of fiscal deficit lower than 4.5 per cent of GDP by FY 2025-26.