liquidity
gb/lɪkwˈɪdɪti/ us/lɪkwˈɪdɪti/
B2
English
~ 9800
Senses
0 senses
Noun
technical
C1
property
1
ability to meet cash needs
How easily a person or company can get cash, or turn things they own into cash, so they can pay bills soon.
Usage pattern:
the liquidity of [a company/system]
Common mistake:
Learners often confuse "liquidity" with "profit" or "solvency." A company can be profitable overall but still have low liquidity if it does not have enough cash right now. "Solvency" is about long-term ability to pay all debts, while "liquidity" focuses on short-term payments.
Synonyms
cash reserves (Focuses specifically on the amount of cash saved, while "liquidity" also includes assets that can quickly be sold for cash.)
Antonyms
illiquidity (Describes a lack of cash or easily sold assets, making it hard to pay short-term obligations.)
Collocations
liquidity crisis
|liquidity position
|liquidity risk
|liquidity ratio
|provide liquidity
|inject liquidity
Themes
finance
|business
|economics
Examples
- The company has enough liquidity to survive several months of lower sales.
- During the financial crisis, many banks struggled with a sudden loss of liquidity.
- Investors watch a firm’s liquidity closely to see whether it can cover its short-term debts.
- The central bank injected liquidity into the system to keep credit flowing.
- Poor liquidity was one of the main reasons the business went bankrupt.
Learner examples
- The store needs good liquidity so it can pay its workers on time.
- Because of low liquidity, the small company could not pay its bills.
- The bank improved its liquidity by holding more cash.
- Strong liquidity helps a business feel safe in hard times.
Noun
technical
C2
property
2
ease of trading an asset
How easy it is to buy or sell something, like a stock, quickly and in big amounts without changing its price a lot.
Usage pattern:
liquidity in [a market/asset]
Common mistake:
Learners sometimes think market "liquidity" only means high trading volume. While volume is related, liquidity also includes how much a trade changes the price and how tight the bid–ask spread is.
Synonyms
market depth (Stresses the amount of buy and sell orders at different prices; "liquidity" is the broader, more common term for how easily trading can happen.)
Antonyms
illiquidity (Describes a market or asset that is hard to trade quickly without moving the price a lot.)
Collocations
market liquidity
|liquidity in the bond market
|provide liquidity
|liquidity provider
|liquidity pool
|low liquidity
Themes
finance
|economics
|business
Examples
- High liquidity in the stock market allows large trades to be executed with minimal price impact.
- Investors demand extra return for holding assets with low liquidity.
- The fund focuses on securities with strong liquidity so it can exit positions quickly.
- Regulators are concerned about declining liquidity in corporate bond markets.
- Cryptocurrency exchanges vary widely in terms of liquidity and trading volume.
Learner examples
- Big markets usually have high liquidity.
- Because there was low liquidity, it took a long time to sell the shares.
- Traders like markets with good liquidity.
- The bank acts as a liquidity provider for its clients.
Noun
technical
B2
state
3
state of being liquid
The state of a substance when it is a liquid and can flow, not a solid or a gas.
Usage pattern:
the liquidity of [a substance/mixture]
Common mistake:
Learners sometimes use "liquidity" instead of "liquid" in everyday speech (e.g., saying *"This soup has a good liquidity"*). In normal conversation, people usually say "This soup is very liquid" or "This soup is very runny"; "liquidity" is more technical or scientific.
Synonyms
fluidity (Often refers more specifically to how easily a liquid flows, while "liquidity" here is the broader condition of being in liquid form.)
Antonyms
solidity (Describes the opposite physical state, when a substance is solid and does not flow.)
Collocations
high liquidity
|loss of liquidity
|liquidity of the mixture
|liquidity of the soil
|change in liquidity
|maintain its liquidity
Themes
science
|chemistry
|core_vocabulary
Examples
- The liquidity of the mixture increases as more water is added.
- At higher temperatures, the fat loses its firmness and gains liquidity.
- Engineers must consider the liquidity of the soil before building on it.
- The paint’s liquidity makes it easy to spread in a thin layer.
- Refrigeration reduces the oil’s liquidity and makes it easier to handle.
Learner examples
- Heat changes the ice into water and gives it liquidity.
- The chef adjusted the soup’s liquidity by adding more stock.
- Because of its low liquidity, the cream did not pour well.
- Too much water increases the liquidity of the cement mix.
Grammar
Dictionary form
liquidity
IPA
GB/lɪkwˈɪdɪti/
US/lɪkwˈɪdɪti/
Syllables & stress
li - quid - ity (3 syllables)
Stress on 2nd syllable (quid)
Word forms
Noun
- Base: liquidity
- Plural: liquidity
Word family
Core family
liquid
adjective A2
liquefy
verb
Related words
liquidate
verb C1
liquidation
noun C1
Negative and opposite forms
illiquid
adjective
illiquidity
noun C1
Advanced or less common
liquidator
noun
Expressions
inject liquidity
1/ɪnd͡ʒˈɛkt lɪkwˈɪdɪti/
fixed phrase
technical
add cash to the financial system
To put more cash or easy money into the banking or financial system, usually done by a central bank.
Examples
- The central bank decided to inject liquidity to calm the markets.
- Governments often inject liquidity during times of financial stress.
liquidity crisis
1/lɪkwˈɪdɪti kɹˈaɪsəs/
fixed phrase
technical
severe shortage of liquidity
A serious time when banks or companies suddenly do not have enough cash to pay their short-term bills.
Examples
- The global liquidity crisis forced several banks to seek emergency support.
- A sudden liquidity crisis can quickly spread from one financial institution to many others.
liquidity crunch
1/lɪkwˈɪdɪti kɹˈʌnt͡ʃ/
fixed phrase
period of tight cash conditions
A period when it is hard for companies or people to get cash or short-term loans.
Examples
- Small firms were hit hardest by the liquidity crunch and could not renew their loans.
- The central bank cut rates to ease the liquidity crunch in the banking sector.
liquidity event
1/lɪkwˈɪdɪti ɪvˈɛnt/
fixed phrase
technical
event turning equity into cash
A business event, like selling the company or selling its shares to the public, that changes owners’ shares into cash.
Examples
- The startup’s investors are hoping for a liquidity event within five years.
- An initial public offering is a common type of liquidity event for early shareholders.
liquidity ratio
1/lɪkwˈɪdɪti ɹˈeɪʃioʊ/
fixed phrase
technical
measure of a firm’s liquidity
A number that shows how much liquid money and assets a company has compared with the bills it must pay soon.
Examples
- Analysts were reassured by the bank’s strong liquidity ratio.
- The company improved its liquidity ratio by reducing short-term debt.
liquidity squeeze
1/lɪkwˈɪdɪti skwˈiz/
fixed phrase
technical
tight but not collapsed liquidity
A time when there is less cash and short-term money in the system, so borrowing becomes harder, but it is not a full crisis.
Examples
- Banks raised lending rates during the liquidity squeeze.
- Regulators stepped in to relieve the liquidity squeeze affecting money markets.
liquidity trap
1/lɪkwˈɪdɪti tɹˈæp/
fixed phrase
technical
low-rate situation where policy fails
An economic situation where interest rates are already very low, people still hold onto cash, and cutting rates more does not make them spend or invest.
Examples
- Some economists argued that the country had fallen into a liquidity trap after years of near-zero interest rates.
- In a liquidity trap, traditional monetary policy loses much of its power.