'' China's central bank devalued its tightly controlled currency, causing its biggest one day loss in two decades as the world's second largest economy continues to sputter. Chinese authorities said that the change would help drive the currency toward more market driven movements. The move also signaled the governments growing worry about slow growth.''

Describe the possible methods with which the China's central bank was able to have its currency ''tightly controlled''. Why and how a more market-driven CHY may address the government's growing worry about slow growth'' explain the impact of the Chinese government's intervention to the demand and supply of CHY and discuss whether foreign exchange arbitrage is possible.