Liquidity

How to spell liquidity

9 letters · 4 syllables

How to pronounce liquidity

Say the part in capitals loudest.

What does liquidity mean?

1. nounThe degree to which an asset or a business can be quickly converted into ready cash without losing value.
2. nounThe state of being liquid or fluid rather than solid or gas.

Liquidity in a sentence

• The bank held extra reserves to maintain its liquidity during the crisis.

• Heating the wax restored its liquidity so it could be poured into the mould.

• Property is a poor investment for anyone who needs liquidity in a hurry.

• The scientist measured the liquidity of the sample at different temperatures.

Where does liquidity come from?

Language of origin: Latin

The word ultimately rests on the Latin verb liquere, which meant 'to be fluid' or 'to flow', the same root that gave us 'liquid'. From liquidus, meaning 'flowing' or 'clear', English built 'liquid' in the late 1300s, and the abstract noun 'liquidity' followed to name the quality of being fluid. For centuries it referred mainly to physical fluidity and to clearness, since a flowing liquid was often a transparent one. The financial sense, the ease with which an asset can be turned into ready cash, grew out of that metaphor of money 'flowing' freely, and it became common in economics and banking from the nineteenth and twentieth centuries. The spelling trap lives in the middle: the unstressed -id- and the double helping of the letter shapes around 'qu' make writers hesitate, even though it follows the same neat pattern as 'liquid' plus '-ity'.

How the word is built

• liqu- (from Latin liquere: to be fluid)
• -id (adjective ending)
• -ity (noun-forming suffix denoting a state or quality)