Indonesia central bank says will avoid currency war

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March 11, 2016 2:49 AM EST

People walk near an entrance to Bank Indonesia's headquarters in Jakarta, Indonesia January 14, 2016. Indonesia's central bank, comfortable that higher U.S. interest rates have not spurred big outflows, cut its interest rates for the first time in nearly

JAKARTA (Reuters) - Indonesia's central bank is watching the exchange rate policies of China and Japan in case they lead to a currency war, but it will not be sucked into any competitive devaluations of the rupiah, its deputy governor said on Friday.

The comment came when he was asked if the European Central Bank's (ECB) monetary easing might encourage countries to devalue their currencies.

"On whether or not there will be a currency war, I feel that it might happen more between China and Japan, possibly Korea," Mirza Adityaswara, senior deputy governor of Bank Indonesia said. "For Indonesia, our products do not compete with the Chinese, Japanese and Korean ... Indonesia will not join a currency war."

He also said ECB's latest move will bring capital inflows to emerging markets in Asia, including Indonesia.

(Reporting by Nilufar Rizki and Hidayat Setiaji; Writing by Gayatri Suroyo; Editing by Simon Cameron-Moore)


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