The European Central Bank increased its policy rate by 50 basis points to 3.5% on Thursday.

This is the sixth consecutive interest rate hike since July 2022.

"Inflation is projected to remain too high for too long," the central bank said in a statement.

It said the asset purchase program portfolio is declining at a measured and predictable pace.

"The decline will amount to €15 billion ($15.9 billion) per month on average until the end of June 2023 and its subsequent pace will be determined over time," the bank said.

The bank will also continue applying flexibility in reinvesting redemptions coming due in the pandemic emergency purchase program portfolio, "with a view to countering risks to the monetary policy transmission mechanism related to the pandemic," it added.