As China's growing economic and political power threatens to erode the US dollar's global dominance, central banks are increasingly keen to hold the Chinese currency as a reserve currency.

The annual reserve manager survey shows that 85% of central banks are invested or considering investing in the Chinese currency. It was up from a year ago.

Foreign exchange managers at central banks are looking to increase their holdings of the Chinese currency in the next 10 years. That would be a huge increase from the International Monetary Fund's report last week.

The US and its allies' freezing of Russia's foreign exchange reserves in response to the invasion of Ukraine has led to speculation that countries will move away from the dollar in order to be less exposed to Washington.

At times of crisis, foreign exchange reserves are used to protect domestic currency. The top central banks were surveyed by the Swiss bank.

The survey shows that the average share of US dollar holdings by central banks was down from a year ago. Fewer Latin American banks held more dollars this year than in the past.

Russia's invasion of Ukraine and Beijing's close relationship with Moscow have increased talk of a "multipolar" world in which the US is no longer the dominant force.

A majority of respondents to the survey said China's renminbi would benefit from a shift in the world's balance of power. The dollar would benefit in a sign of the asset's appeal during times of economic or political tension.

The renminbi has risen to reserve currency status, according to the report.

The Chinese currency is not close to challenging the dollar for the top spot in global reserves.

Analysts say Beijing's leadership makes holding Chinese assets risky. The property sector has wobbled over the last year as doubts have grown about the economy.

The dollar has appreciated this year due to the Federal Reserve hiking interest rates. The dollar index is close to its highest level in 20 years.