The country's current account deficit, CAD, narrowed sharply to 4.2 billion dollars, or 0.9 per cent of GDP, in the third quarter of the current fiscal, compared to the year-ago quarter. Releasing the external sector data, the Reserve Bank said the CAD fell due to a pick-up in exports, and decline in imports, particularly gold imports. The CAD reflects the difference between the inflow and outflow of foreign currency. Merchandise exports increased 7.5 per cent in the third quarter of the current fiscal, while imports declined 14.8 per cent. Gold imports dropped to 3.1 billion dollars, compared to 17.8 billion dollars in the year-ago quarter. So the trade deficit contracted by about 43 per cent during the quarter.