liquidity

American  

[li-kwid-i-tee] / lɪˈkwɪd ɪ ti /

noun

1. a liquid state or quality.

2. the ability or ease with which assets can be converted into cash.

---

liquidity British  

/ lɪˈkwɪdɪtɪ /

noun

1. the possession of sufficient liquid assets to discharge current liabilities

2. the state or quality of being liquid

---

liquidity Cultural  

1. The condition of having enough money on hand to meet financial obligations without having to sell fixed assets, such as machinery or equipment.

---

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!

Example Sentences

Liquidity thrives on transparency, which thrives on data.

From The Wall Street Journal • Mar. 25, 2026

Liquidity risk has historically been limited in private credit.

From MarketWatch • Feb. 26, 2026

Liquidity in the financial system will grow and rates will remain low enough to support economic growth.

From Barron's • Dec. 16, 2025

She inherited a museum in dire straits: Liquidity issues continued into 2023.

From Seattle Times • May 5, 2024

Return Liquidity or Liquidation Large parts of the world today suffer from a severe liquidity crisis.

From After the Rain : how the West lost the East by Vaknin, Samuel