NUSA DUA, Indonesia (Reuters) - China's central bank governor Yi Gang said the government would continue to let the market play a decisive role in establishing its currency exchange rate, refraining from using it as a weapon, amid an escalating trade war with the United States.

"We will not engage in competitive devaluation, and will not use the exchange rate as a tool to deal with trade frictions," Yi said in an International Monetary and Financial Committee (IMFC) statement posted on Saturday during the IMF and World Bank annual meetings in Indonesia's resort island of Bali.

Yi said the government would keep the exchange rate "broadly stable", and China's monetary policy would remain neutral with more focus on guiding expectations.

(Reporting by Yawen Chen; Editing by Clarence Fernandez)

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