ECB raises interest rates by 25 bps

FRANKFURT - The European Central Bank decided on Thursday to raise its main interest rates by 25 basis points (bps) in a bid to quell inflation.

As of May 10, the interest rates on the main refinancing operations, the marginal lending facility and the deposit facility will be increased to 3.75 percent, 4.00 percent and 3.25 percent, respectively, the bank said in a statement.

The interest rate on the deposit facility has been brought up to a level last seen in October 2008, it said.

The inflation outlook continues to be "too high for too long," the bank said. Regarding its future moves, it stressed that its future policy decisions, which will be mainly centered on interest rates, will be aimed at achieving a timely return of inflation to the 2 percent medium-term target.

The ECB has also been reducing its asset purchase program portfolio. The decline will amount to 15 billion euros ($16.6 billion) per month on average until the end of June 2023 and the reinvestment of the principal payments from maturing securities will come to an end as of July.

Annual inflation in the 20-member eurozone declined to 6.9 percent in March from 8.5 percent in February, according to the statistical office of the European Union.

"Headline inflation has declined over recent months, but underlying price pressures remain strong," the ECB said.