© Reuters. FILE PHOTO: The Bank of Thailand logo is pictured in Bangkok, Thailand, August 5, 2016. Picture taken August 5, 2016. REUTERS/Chaiwat Subprasom/File Photo

BANGKOK (Reuters) – Thailand’s central bank raised its key interest rate by 25 basis points for a third straight meeting on Wednesday, as it tries to contain above-target inflation while supporting an economic recovery facing increasing global headwinds.

The Bank of Thailand’s (BOT) monetary policy committee voted unanimously to raise the one-day repurchase rate to 1.25% at its final review of the year.

“The tourism sector continues to strengthen…Additionally, private consumption is supported by improving economic activities,” the statement said, adding that the financial sector remained resilient.

Headline inflation was seen at 6.3% in 2022 and expected to return to within a target range next year. Southeast Asia’s second-biggest economy was expected to grow 3.2% this year and 3.7% next year, the central bank said.

Rate hikes will be gradual and measured, the BOT said, but added that their size and timing would be adjusted if needed.

The baht was up 0.4% after the hike. The BOT said the currency remained highly volatile and was being monitored closely.

All but two of the 19 economists surveyed by Reuters had expected a quarter-point hike while the remaining two had predicted no policy change.

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