Is covered interest parity an arbitrage or a hedging condition?

Although covered interest parity (CIP) can be derived as an arbitrage or a hedging condition in the absence of the bid-offer spreads, the arbitrage condition collapses when the spreads are introduced. It is shown that CIP is better described as a hedging condition, which means that it cannot be used to measure the extent of capital mobility, as typically suggested in the literature. Furthermore, CIP is the results of a banking operation, and it holds irrespective of the market efficiency and the presence or otherwise of capital controls.