June 30 (Reuters) - China's yuan sank to a six-month low against the dollar in offshore trade on Thursday and the Australian dollar fell almost one percent after Reuters reported the People's Bank of China is willing to let the Chinese currency weaken to 6.80 per dollar.
Government economists and advisers involved in regular policy discussions said the central bank would aim for a gradual decline for fear of triggering the sort of capital outflows that shook the economy in January or criticism from trading partners.
But they said the central bank was willing to let the currency fall by as much as last year's record decline of around 5 percent. The yuan is already trading close to its lowest level in more than five years.
"The Aussie and the yuan have just taken a big knock on that story," said Sam Lynton-Brown, a currency strategist with French bank BNP Paribas (PA:BNPP) in London. "The Aussie is now by far the biggest mover among the major currencies today as a result."
The offshore yuan fell as low as 6.70 per dollar CNH= and the Australian dollar fell as low as $0.7373 AUD= .
(Writing by Patrick Graham; Editing by Jamie McGeever)