This dissertation examines the behavior of covered interest rate parity (CIP) deviations across G10 currencies during the global financial stress triggered by the COVID-19 pandemic. Using daily data, the study documents on how structural demand for dollar hedging, balance-sheet constraints of dealers, and interest-rate differentials jointly shaped the cross-sectional patterns of deviations. During the pandemic onset, several high-beta currencies such as AUD and NZD exhibited large positive basis, while others showed the more conventional negative basis, in part reflecting carry-trade unwinding and the sharp, synchronized fall in global interest rates. A key finding is the exceptional speed of normalization. Roughly 100 days after the WHO officially declared the COVID-19 outbreak a pandemic the cross-currency basis had largely stabilized. The evidence points to the decisive role of rapid and coordinated central bank interventions, including aggressive policy rate cuts, the swift activation of USD liquidity swap lines, and the introduction of the FIMA repo facility, all of which contributed to easing dollar funding pressures. Overall, the results highlight how institutional structures, market segmentation, and policy responses jointly determine the magnitude and persistence of CIP deviations in periods of systemic stress.