While the interest rates on time deposits have increased alongside the policy rate, the widening of the spread between overnight deposit rates and policy rates is in line with what has been previously observed during interest rate hiking cycles. Partly this is because overnight deposits offer payment services that are not explicitly priced.
Alongside their short maturity, this has meant that spreads between overnight deposits and the policy rate have been rather wide. This was not the case during the period of negative rates, when many banks spared depositors from the below-zero rates. This can also partially explain the fact that interest rates on overnight deposits have moved much less than policy rates.