An agency to manage China's reserves of foreign exchange more flexibly could be up and running soon, the South China Morning Post reported. People's Bank of China governor Zhou Xiaochuan told the newspaper that the new agency is still in the preparation stage and may soon be officially set up. The new unit was first announced in March and Beijing tapped former finance vice-minister Lou Jiwei to run it. It would help manage part of the country's US$1.2 trillion in foreign reserves. The agency could start operations this year with some US$200 billion in funds, even if some economists have said it should have double that amount. "Basically, it will enjoy a much higher flexibility in its investments," Zhou said. The government wants the agency to improve the yields and diversify the risks associated with investing the country's forex reserves, which surged US$135.7 billion in the first three months of this year.