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.
As prices retreated last week during the cease-fire between Washington and Tehran, Lambert said liquidity and trading volumes also fell, an apparent pullback from risk and a sign of market fatigue.
From The Wall Street Journal • Apr. 22, 2026
Reserves are a useful form of liquidity for banks, said Darrell Duffie, a finance professor at Stanford Graduate School of Business.
From MarketWatch • Apr. 18, 2026
"The second is what's going on in private credit and the liquidity issues. And third, of course, is what's going on in the Middle East," he said.
From BBC • Apr. 18, 2026
We have seen from time to time that retail investors want to redeem their holdings and get liquidity.
From Barron's • Apr. 18, 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
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.
