Also a liquid currency and a strong balance sheet are a competitive advantage.

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And gold is also less liquid than foreign currency and so cannot easily be used for foreign-exchange intervention to defend a currency under attack.

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The single currency has created a liquid market in European corporate bonds.

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Is it not something of a surprise then to see that the nation with the largest economy, the most influential government, the leading central bank and the only totally liquid, 24-7 reserve currency is not the leader in economic growth within the developed world?

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Hedging emerging market currency risk can be expensive because sometimes those markets are not very liquid and when price direction changes, it can be difficult to lift the hedges.

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Surplus countries have little choice but to place most of their spare funds in the reserve currency since it is used to settle trade and has the most liquid bond market.

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"The Singapore market has shown that it's becoming far more liquid, and people also like having an exposure to the Singapore dollar, " a currency that has been favored by investors who like the city-state's political and economic stability, Mr. Crockett said.

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The M1 is a very liquid measure of the money supply, as it contains cash and assets that can quickly be converted to currency.

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