In this case, a bank makes a deposit at a fixed rate for a given period, and the balance on its sight deposit
account is reduced by a corresponding amount during that period.
To what extent the exchange rate will depreciate as a result of a reduction in the sight deposit
rate depends on several factors.
By providing and absorbing liquidity by means of fixed-rate loans and deposits (see separate box for definition), Norges Bank ensures that at the end of each day the banking system has sight deposits
of the order of NOK 5-12 billion in Norges Bank.
The proportion of total deposits by the non-banking sector accounted for by sight deposits
A strong increase in KD deposits, propelled by a sizeable gain in sight deposits
, was behind the increase in private resident deposits.
Gains in dinar saving and sight deposits
were partly offset by a decline in dinar time deposits.
In local currency deposits, time deposits declined KD 241 million while sight deposits
were up KD 157 million.
In December, resident deposits were up slightly (+KWD 25 million) exclusively in local currency accounts and mostly in sight deposits
. Resident deposits were up eight per cent in 2011 (+KWD 2 billion) mostly in shorter term deposits.
assets fell KD 155 million in July, with time and sight deposits
The third limitation of the current experience is that, partly for the reasons just mentioned plus the prevalent tiering system, negative rates have not been transmitted to retail sight deposits
in any of the five jurisdictions with negative policy rates.
This development reflects a significant rise in sight deposits
among banks and a recovery in April of certificates of deposit and banknotes and coins in circulation.
The largest decline came from KD sight deposits
, down KD 451 million, though savings and foreign currency deposits were also lower.