A traderelated debt which is in the nature of collateralised debt may be less severe on reserve requirements. Third, any addition to portfolio flows may warrant comfort through some additions to reserves. In fact, there is merit in presuming that the flows are temporary till there is reason to judge them to be permanent.
Fourth, it is necessary to recognise that reserves provide cushion to manage real and external sector shocks like oil prices. Fifth, there is usually an opportunity cost of maintaining foreign exchange reserves, but this must be weighed against the financial and non-financial costs associated with volatile and adverse exchange rate movements.