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Economy
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Liquid Asset
See AlsoWhat is liquidity and how do you measure it?What is liquidity?LiquidityMonitoring Liquidity | AnalystPrep - FRM Part 2 Study NotesAn asset is said to be liquid if it is easy to sell or convert into cash without any loss in its value.
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Liquidity Trap
Liquidity trap is a situation when expansionary monetary policy does not increase the interest rate, income and hence does not stimulate economic growth.
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Definition: Liquidity means how quickly you can get your hands on your cash. In simpler terms, liquidity is to get your money whenever you need it.
Description: Liquidity might be your emergency savings account or the cash lying with you that you can access in case of any unforeseen happening or any financial setback. Liquidity also plays an important role as it allows you to seize opportunities.
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What is LiquidityIf you have cash and easy access to fund and a great deal comes along, then it's easier for you to cease that opportunity. Cash, savings account, checkable account are liquid assets because they can be easily converted into cash as and when required.
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- LIQUIDITYSAVINGS
- PREV DEFINITION
Liquid Asset
An asset is said to be liquid if it is easy to sell or convert into cash without any loss in its value.
Read More
- NEXT DEFINITION
Liquidity Trap
Liquidity trap is a situation when expansionary monetary policy does not increase the interest rate, income and hence does not stimulate economic growth.
Read More
Related Definitions
- Asset Turnover RatioAsset turnover ratio is the ratio between the value of a company’s sales or revenues and the value of its assets. It is an indicator of the efficiency with which a company is deploying its assets to produce the revenue. Thus, asset turnover ratio can be a determinant of a company’s performance. The higher the ratio, the better is the company’s performance. Asset turnover ratio can be different froAusterity economic growth of country is determined by factors such as Capital structure, Human resources, Natural resources and revenue generation of businesses operating within the nation. A decline in the economic development can impact all the four factors of a government system. One of the main contributors of decline in the economic system is debts. A country borrows money from creditors, with the vieBailoutBailout is a general term for extending financial support to a company or a country facing a potential bankruptcy threat. It can take the form of loans, cash, bonds, or stock purchases. A bailout may or may not require reimbursem*nt and is often accompanied by greater government oversee and regulations.The reason for bailout is to support an industry that may be affecting millions of people inBalance Of PaymentAccording to the RBI, balance of payment is a statistical statement that shows1. The transaction in goods, services and income between an economy and the rest of the world,2. Changes of ownership and other changes in that economy’s monetary gold, special drawing rights (SDRs), and financial claims on and liabilities to the rest of the world, and3. Unrequited transfers.Description: The tran
- Bank RateBank rate is the rate charged by the central bank for lending funds to commercial banks. Description: Bank rates influence lending rates of commercial banks. Higher bank rate will translate to higher lending rates by the banks. In order to curb liquidity, the central bank can resort to raising the bank rate and vice versa.Also See: Base Rate, Call Money RateBarter the hard currency came into existence, the most common form of trade was bartering. Barter Systemdates back to the old time when there was no money. The only way to buy goods was to exchange them with personal belongings of similar value. For example- A farmer gives his cattle in exchange for some land, and so on. In simple words, any exchange of goods and services for other goods and services wiBase RateBase rate is the minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers. Description: Base rate is decided in order to enhance transparency in the credit market and ensure that banks pass on the lower cost of fund to their customers. Loan pricing will be done by adding base rate and a suitable spread depending on the credit risk premium.AlsBasel IiiThe third Basel accord or Basel-III is the cornerstone of banking supervision in the world. Framed by a committee of elite central bankers, the accord provides the guidelines for prudent supervision of banks all over the world and sets the standard for such supervision.Description: Basel-III is third in the series of accords following Basel-I and Basel-II. It was released in December, 2010, in
- BrexitIt is an abbreviation for the term “British exit”, similar to “Grexit” that was used for many years to refer to the possibility of Greece leaving the Eurozone. Brexit refers to the possibility of Britain withdrawing from the European Union (EU). The country will hold a referendum on its EU membership on June 23.Description: Why the Call for Referendum?When David Cameron became the prime miBrics the BRICS?BRICS is an acronym that started as BRIC in 2001, coined by Jim O’Neill (a Goldman Sachs economist) for Brazil, China, India, and Russia. Later in 2010, South Africa was added to become BRICS. Goldman Sachs claimed that the global economy will be dominated by the four BRIC economies by 2050. The main reason for such a claim was that China, India, Brazil, Russia, and South Africa were ra
Related News
Dipan Mehta, Director of Elixir Equities, discussed the current bullish market scenario that is being driven by strong liquidity flows and constrained supply. He underlined the importance of earnings momentum and the positive impact of lower crude prices on the Indian economy. Mehta also expressed optimism about the hospitality sector's growth prospects.- Where is the pocket of safety in the market right now? Aashish Somaiyaa answersAashish Somaiyaa, CEO of WhiteOak Capital AMC, provides an analysis of trends in financial services, IT, and auto sectors. He explains that the auto sector is normalizing after a difficult period from 2018 to 2020. Financial services and industrials show promise amid changing macroeconomic conditions. Somaiyaa also says that they are benefiting from sector rotation at play.
- Investors want India to sell short tenor, floating rate bonds in H2, bankers sayInvestors want the Indian federal government to sell more short-term and green bonds while resuming floating rate bond auctions, six bankers said on Tuesday.
- Credit growth outpacing deposit growth could lead to liquidity challenges: ReportCredit growth is surpassing deposit growth, posing potential liquidity challenges for banks, according to a FICCI-IBA report. Banks are focusing on raising deposits and keeping credit costs low. The survey also highlights a decrease in CASA deposits and an increase in term deposits due to attractive rates.
- Can we expect a big recovery in largecap private banks soon? Nilesh Shah answersNilesh Shah of Kotak AMC discusses the potential effects of RBI's liquidity coverage ratio guidelines on banks' profitability and the challenges posed by deposit competition. He also examines government and private sector capex trends, noting possible shortfalls in state investments. Additionally, Shah provides insights into the power sector, predicting shortages and investment opportunities.
- Nilesh Shah of Kotak AMC stresses the need to focus on quality stocks rather than momentum in the current market scenario. He identifies sectors like IT, FMCG, pharma, chemicals, and banking as having reasonable valuations. Shah also takes note of India's market resilience but cautions against excessive valuations driven by liquidity.
- Any major market correction unlikely; risks to come from outside India, not inside: Sandeep BhatiaSandeep Bhatia, Managing Director at Macquarie Capital, explains that Indian equity markets has remained stable due to strong domestic investment habits and liquidity. He discusses the impact of government and private sector capex, rural recovery, and upcoming elections on market trends while highlighting global risks that could affect overall stability.
- WACR drops to 6.49% amid surplus liquidity, just below RBI repo rateThe weighted average call rate, which indicates banks' overnight cost of borrowing, closed at 6.49% on Thursday, slightly lower than the Reserve Bank of India's current repo rate of 6.50%, because of surplus liquidity conditions in the banking system, money market dealers said.
- WACR dips to 6.46% as surplus liquidity boosts banking systemThe weighted average call rate, which indicates banks' overnight cost of borrowing, closed at 6.46% on Wednesday, four basis points lower than the Reserve Bank of India's current repo rate of 6.50%, due to surplus liquidity conditions in the banking system, money market dealers said.
- Standard Chartered carries out first OTC derivative for gold price hedging from GIFT CityStandard Chartered Bank has carried out the maiden over-the-counter derivative deal for hedging gold price risk from the Gujarat International Finance Tec-City (GIFT City), around two months after the International Financial Services Centres Authority (IFSCA) permitted such transactions.
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