CLI link to project error

When I use the CLI (v1.0.7) and run supabase link --project-ref PROJECT_ID, I get an error:
Error: failed to connect to `host=db.PROJECT_ID.supabase.co user=postgres database=postgres`: failed SASL auth (FATAL: SASL authentication failed (SQLSTATE 08P01))

How can I connect my local instance to my project?
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