European Central Bank (ECB) Executive Board member Benoit Coeure said in a speech on Tuesday that the central bank would not cut its deposit rate to "absurdly low levels".

"If anything, the smooth changeover to negative rates has only underlined the adaptability of market participants to this new environment, especially the money market funds industry," he said.

Coeure noted that banks' profitability improved, supported by the ECB's monetary policy.