According to weekly data from the Reserve Bank of India (RBI) on Friday, India's foreign reserves plummeted by USD 5.24 billion to USD 617.23 billion. Also, the FX kitty totaled USD 622.5 billion for the week. However, foreign reserves have climbed by USD 50.28 billion, according to RBI data in the current fiscal year.

Foreign currency assets, which make up the majority of reserves, fell by USD 4.07 billion to USD 546.52 billion during the week under review, as per the data.

Furthermore, despite pressures triggered mostly by global developments since last year, the reserves fell as the central bank sold dollars to preserve the rupee.

As a result, the rupee has fared best among Asian currencies this fiscal year. To know the cause of why there was a steep drop in overall reserves, it can be caused by a sharp loss in foreign currency assets, which account for the single greatest component of the reserves.

Foreign currency assets, expressed in dollar terms, include the effect of non-US currency appreciation or depreciation in foreign exchange reserves, such as the euro, pound, and yen.

The country's reserve position with the IMF fell by USD 28 million to USD 48.32 billion during the reporting week.