Bridesmaid dilemma - do i have to reciprocate?

Absolutely you do not have to reciprocate. Is your wedding and your choice. I was MOH for my sister in law but she was not part of my bridal party. You could maybe broach it that you already have your bridal party chosen so don't have space for another BM but maybe you could ask her to do a reading, if you felt comfortable with that?

It's SUCH a tricky situation when you're wedding planning at the same time. As Charlotte said, you don't have to reciprocate but it's one of those awkward things where it's often expected/feels like a statement if you don't.

How many bridesmaids is the other bride having? It's a different situation if you're one of 8 for her but you're only having 4. Similarly, are any of yours or hers siblings/family? One of my bridesmaids is having (/forced to have) mostly family as her bridesmaids so unless she can convince her family to let her do her own thing, I know I won't be a bridesmaid because her priority for her wedding is to please her very particular families where obligation is a huge deal (whereas I have no obligation people in my party so can be whoever I like), I still know we value each other the same but our wedding situations are very different. So worth thinking if there's anything like that in your situation that could soften the blow.

As Charlotte says, you could ask her to do a reading... but I personally am of the opinion that if you're not that close to someone (as you say you feel you aren't) then you shouldn't feel pressured into including them just out of obligation. However, it's worth being aware that a lack of reciprocation could damage the friendship a bit, depending on how the other bride takes it - the gist of the situation boils down to her valuing you more as a friend than you do her (which is fine and valid and happens sometimes, but can be a bit awkward!). Would you want this person to be a closer friend than they are? If so, a reading might be a good olive branch. If not, be as kind as you can but be aware there might be a bit of a fall out as a result.