I started to notice my BG dropping (both fasting and post-prandial) after I'd lost 10% of starting weight, I was also on 2x500mg metformin daily, but that didn't really drop my BG much until I'd lost the weight.
Now I've dropped around 35% of my starting weight (and my BMI is now 'normal') my BG levels have returned to normal fasting and post-prandial values and even passed an OGTT. I'm still on one 500mg Metformin daily, but when I skipped that for almost a week (ran out), it didn't make any difference. I also exercise a reasonable amount - lots of brisk walking, but nothing intense like gym-work. I do ensure that I have a good walk pretty much every day, rather than just weekends only.
I'm going to stay on the Met even though I could probably (for now) get away without it - I may as well try and reduce the stress on my pancreas a bit...
Mark