(Bloomberg) -- European Central Bank President Christine Lagarde said underlying inflation remains “significantly too high” — even after the headline measure of price gains for the euro zone dropped by the most on record this month.

Core inflation, which strips out volatile energy and food costs, accelerated to an all-time high of 5.7% in March, while the main number plunged to 6.9% from 8.5%.

The ECB still has “ground to cover” to bring inflation back to 2% over the medium term, Lagarde told students in Florence, Italy, on Friday. Nevertheless, the 350 basis points of interest-rate increases since last July “is beginning to work,” she said.

Lagarde reiterated that the recent financial-market stress won’t interfere with the fight against elevated prices, and said Deutsche Bank shouldn’t be compared to the downfall of of Credit Suisse Group AG.

She said Europe’s financial system is strong, meaning something similar to the collapse of Silicon Valley Bank is very unlikely.

(Updates with additional Lagarde comment in final paragraph.)

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