Deviations from interest rate parity could be due to transaction costs,differential taxation,government controls,and political risk.

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Deviations from interest rate parity can be caused by a variety of factors, including transaction costs, differential taxation, government controls, and political risk. These factors can create disparities between foreign and domestic interest rates, leading to deviations from interest rate parity.

Deviations from Interest Rate Parity Could Be Due to Transaction