The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

International Liquidity

  • A. D. Crockett
Reference work entry


International liquidity may be defined as that stock of assets which is available to a country’s monetary authorities to cover payments imbalances (when the exchange rate is fixed) or to influence the exchange value of the currency (when the exchange rate is flexible). A distinction may be drawn between unconditional liquidity, which is generally owned by the country concerned and may be used at its sole discretion, and conditional liquidity, which comprises access to borrowing facilities and is generally available only on conditions set by the lenders. Because of the obvious practical difficulties in measuring conditional liquidity, the operational measure of international liquidity that is generally used in discussion of the subject is that of gross international reserves.

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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • A. D. Crockett
    • 1
  1. 1.