Definition

The state in which an asset cannot be easily converted into cash or is not easily sold in the market.

Example

The company's illiquidity made it difficult for them to meet their short-term financial obligations.

Conversation

Have you heard about the issue of illiquidity in the market lately?

Yeah, it’s been affecting a lot of investors, hasn't it?

Exactly! It's tough when assets are tied up because of illiquidity.

For sure, it makes it hard to make quick moves when you need to.

Synonyms & Antonyms

Root Explanation

Illiquidity → It is formed from "il-" (meaning not) and "liquidus" (from Latin, meaning liquid or fluid). The term describes a state of being not liquid, particularly in financial contexts where assets cannot be quickly converted to cash.

Memory Tip

Think of 'not' ('il-') being combined with 'liquid' ('liquidus') to remember that illiquidity refers to something that cannot be easily turned into cash.

Visually Confused Words