Pattanaik, Sitikantha creator text xu| 1996 continuing ng p.93-120 "The paper highlights some of the issues relating to management of official reserves in the context of a market based exchange rate policy, a liberalised payments regime and the healthy build up of reserves experienced since April 1993 in India. The focus is on identifying the major determinants of demand for reserves and estimating the reserve demand function which would help in assessing reserve optimality. Econometric analysis conducted in the paper using both conventional and cointegration techniques indicates that volume of international transactions (i.e. scale factors) and the volatility of such transactions (i.e. instability) are the important determinants of demand for reserves in India which underscores the importance of a stable external environment for management of reserve levels. The cointegration results also establish the opportunity costs of holding reserves as another important determinant of reserve demand in India" Foreign exchange Reserve Bank of India: Occasional Papers 180718