excess liquidity
[ɪkˈsɛs lɪˈkwɪdɪti]
noun
liquidez em excesso
1. An excessive amount of money supply or liquid assets in circulation within an economy or financial system, beyond what is needed for normal economic transactions
The central bank's quantitative easing policies led to excess liquidity in the market.
As políticas de flexibilização quantitativa do banco central levaram a uma liquidez em excesso no mercado.
2. A situation where financial institutions or investors hold more cash or readily available funds than required for operational needs
Banks are facing excess liquidity and struggling to find profitable investments.
Os bancos estão enfrentando liquidez em excesso e têm dificuldade em encontrar investimentos lucrativos.
3. A condition that typically results in lower interest rates and increased inflationary pressures
Excess liquidity in the economy can drive up asset prices and inflation.
A liquidez em excesso na economia pode elevar os preços dos ativos e a inflação.
This is primarily a technical term used in finance, economics, and central banking discussions. In Brazil, it became particularly relevant during discussions about monetary policy and inflation control, especially in periods of economic expansion. In the USA, the term gained prominence during and after the 2008 financial crisis when central banks engaged in quantitative easing programs. It reflects concerns about managing money supply effectively to prevent inflation while maintaining economic growth.
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