India, Oct. 23 -- India's forex reserves dropped by $5.011 billion to $721.016 billion during the week ended October 16, the Reserve Bank of India said on Friday.

In the previous reporting week, the kitty declined by $8.578 billion to USD 726.027 billion.

The reserves touched an all-time high of $785.706 billion for the week ended September 4, driven by heavy greenback inflow as part of a special concessional swap for deposits from the diaspora through which banks raised a record nearly $ 133 billion but have been on a declining trend ever since. Experts attribute the sharp decline in the kitty to deployment of FCNR(B) resources and currency defence put up by the RBI through dollar sales.

For the week ended October 16, foreign currency...