liquidity
Americannoun
-
the possession of sufficient liquid assets to discharge current liabilities
-
the state or quality of being liquid
Etymology
Origin of liquidity
From the Latin word liquiditās, dating back to 1610–20. See liquid, -ity
Explanation
Liquidity refers to a state where something is in liquid form, like water. It can also refer to having cash or access to cash. Liquidity means things are flowing. Although liquidity refers to…surprise! being a liquid, it’s usually used in a financial sense. Financially, liquidity refers to having access to cash or things you can sell and turn into cash. In other words, you have good cash flow. Liquidity can also apply to any situation that is marked by fluidity or runniness. You hope your new swimming pool is in a state of liquidity, and that you have enough financial liquidity to pay for it!
Vocabulary lists containing liquidity
Personal Finance and Financial Literacy - High School
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Economics
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Personal Finance and Financial Literacy - Middle School
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Example Sentences
Examples are provided to illustrate real-world usage of words in context. Any opinions expressed do not reflect the views of Dictionary.com.
Are there downsides to this approach, particularly regarding liquidity, inflation, insurer risk, taxes or the opportunity cost of locking in a fixed rate for five years?
From MarketWatch ● Nov. 6, 2026
The report anticipates that tighter credit and liquidity next year will force decelerating AI capex, more credit events and the Federal Reserve being forced to adopt a more dovish approach.
From MarketWatch ● Nov. 3, 2026
The move will require Chinese financial institutions to lock up an additional 2% of their foreign-currency deposits with the central bank, tightening dollar liquidity in domestic markets and helping cool the yuan’s appreciation.
From The Wall Street Journal ● Nov. 3, 2026
The executors for Michael Jackson’s estate began generating liquidity in 2011, including the sale of the singer’s Neverland Ranch in 2020 and the $750-million deal with Sony for intellectual property assets.
From Los Angeles Times ● Nov. 3, 2026
When an executive said his bank had plenty of liquidity it always meant that it didn’t.
From "The Big Short" by Michael Lewis
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Get a wordDefinitions and idiom definitions from Dictionary.com Unabridged, based on the Random House Unabridged Dictionary, © Random House, Inc. 2023
Idioms from The American Heritage® Idioms Dictionary copyright © 2002, 2001, 1995 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company.
