The Bank of Jamaica says there was less cash floating around the system last week than at the end of November but expects the situation to change as the month progresses.

Currency in circulation was estimated at $40.5 billion at December 5, but the central bank says this was half a billion lower than November's.

But, it projects that in a matter of weeks money in the system will top $50 billion, as the Christmas shopping season unfolds.

"During December, there is normally a stronger demand for cash, as a result of the increase in spending during the holiday period," said the central bank.

Spending set to exceed 2007 figure

The BOJ estimates that by December 31 supplies would have reached a peak of $51.1 billion or close to four billion more than the $47.3 billion in circulation at the same time last year.

Currency in circulation is defined as 'notes and coins in the hands of the public', as well as vault cash, that is, notes and coins held by financial institutions.

Last year, in the 12th month, the supply of cash increased by $6.6 billion. This year, the central bank estimates the increase in December will be closer to $10 billion.

"This projected increase is predicated on the assumption that the banks will increase their holding of vault cash above the stock held in 2007, in anticipation of the payment of retroactive salaries to some categories of public sector workers," the BOJ said Tuesday.