We study deviations from Covered Interest Parity (CIP) over one century of daily exchange rate and interest rate data (1921-2021) across a broad sample of currencies. Our first main finding is that substantial CIP deviations have been the norm over the last century – both among advanced economy and emerging market currencies. Second, we show that shocks to the forward exchange rate are the primary determinant of CIP deviations and that such shocks are associated with exchange rate crises particularly relating to pegged currencies. During such crises, in the presence of limits to arbitrage, a rise in devaluation (revaluation) expectations for a given foreign currency relative to the US Dollar (USD) is associated with an increase (decrease) in its USD basis. This channel complements and contrasts with the recent explanations for CIP deviations among advanced economy currencies since the GFC; it also remains relevant to emerging market currencies today given their leanings toward fixed or semi-fixed exchange rate regimes.