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.
Moreover, these "gigantic deals can already drain liquidity from the market and may create situations in which there is more supply than demand," weighing on prices, said PwC's Kubisa.
From Barron's ● Jul. 23, 2026
A declining swap rate would be a sign of shifting liquidity flows and indicative of tightening conditions as hedging costs grow more expensive.
From MarketWatch ● Jul. 23, 2026
Wellington will provide active equity and liquidity management, while Blackstone is managing all of the private assets.
From The Wall Street Journal ● Jul. 22, 2026
Chief financial officer Doug Lafferty said in a statement: "This new £550m debt financing significantly strengthens our liquidity, providing us with both additional resilience and further flexibility to execute our current and future product plans."
From BBC ● Jul. 22, 2026
To which Vinny replied, “The way we thought about it, which we didn’t like, was, ‘By shorting this market we’re creating the liquidity to keep the market going.’”
From "The Big Short" by Michael Lewis
Definitions 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.
