Falling for the second straightweek, India's Frreign Exchange (forex) reserves dropped by USD 4.339 billion to USD 589.138 billion for the week ended May 26, the Reserve Bank said on Friday.

In the previous reporting week, the reserves had declined by USD 6.052 billion to USD 593.477 billion. It can be noted that in October 2021, the country's forex kitty had reached an all-time high of USD 645 billion. The reserves have been declining as the central bank deploys the kitty to defend the rupee amid pressures caused majorly by global developments.

For the week ended May 26, the foreign currency assets, a major component of the reserves, declined by USD 4.014 billion to USD 520.931 billion, according to the Weekly Statistical Supplement released by the RBI on Friday. Expressed in dollar terms, the foreign currency assets include the effect of appreciation or depreciation of non-US units like the euro, pound and yen held in the foreign exchange reserves. 

Foreign exchange reserves include India's Reserve Tranche position in the International Monetary Fund.

The rupee rose 0.1% in the week ended May 26, having traded in a range of 82.5575 to 82.8500.  The rupee ended at 82.3050 on Friday to record its best week in five.

Traders in the forex market aim to profit from fluctuations in currency exchange rates. They speculate on whether a currency will rise or fall in value relative to another and make trades accordingly. Factors such as economic indicators, geopolitical events, interest rates, and market sentiment can influence currency prices.

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