The Rayleigh-product channel model is utilized to characterize the rank deficiency caused by keyhole effects. However, the finite blocklength analysis for Rayleigh product channels is not available in the literature. In this paper, we will characterize the mutual information density (MID) and perform the FBL analysis to reveal the impact of rank-deficiency in Rayleigh-product channels. To this end, we first set up a central limit theorem for the MID over Rayleigh-product MIMO channels in the asymptotic regime where the number of scatterers, number of antennas, and blocklength go to infinity at the same pace. Then, we utilize the CLT to obtain the upper and lower bounds for the packet error probability, whose approximations in the high and low signal to noise ratio regimes are then derived to illustrate the impact of rank deficiency. One interesting observation is that rank-deficiency degrades the performance of MIMO systems with FBL and the fundamental limits of Rayleigh-product channels degenerate to those of the Rayleigh case when the number of scatterers approaches infinity.

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