This paper examines how capital controls affect the volatility of the renminbi (RMB) covered interest deviation (CID). We find that capital controls amplify the volatility of RMB CID and the amplification effect becomes more prominent in more flexible RMB exchange regimes. Capital controls influence the volatility of interest rate differential (IRD) and forward premium (FP), two components of CID, differently, particularly during the U.S. Fed's QE era. In addition, using an error correction model, we show that, while capital controls magnify both the short- and long-run volatility of the CID and the IRD, they do not affect FP volatility.

中文翻译：

---

资本管制和人民币波动覆盖利息偏差

本文研究了资本管制如何影响人民币 (RMB) 覆盖利息偏差 (CID) 的波动性。我们发现资本管制放大了人民币 CID 的波动性，并且在更加灵活的人民币汇率制度中放大效应更加突出。资本管制对利率差 (IRD) 和远期溢价 (FP) 这两个 CID 组成部分的波动性有不同的影响，尤其是在美联储量化宽松时期。此外，我们使用误差校正模型表明，虽然资本管制会放大 CID 和 IRD 的短期和长期波动，但它们不会影响 FP 波动。