KYIV, Oct 25 - The National Bank of Ukraine kept its benchmark interest rate unchanged at 18 percent on Thursday but warned of a possible hike further down the line if rising inflation pressures did not ease, Reuters reported.

It raised its 2018 and 2109 inflation forecasts to 10.1 percent from 8.9 percent and 6.3 percent from 5.8 percent, respectively.

In a statement, it said inflation expectations have worsened and getting price moves down to its target level would take more time, citing rising oil prices, wage growth and external conditions as the main risks.

The bank also gave higher than previously projected estimates for Ukraine’s current account deficit in 2018 and 2019. But it kept its forecast for economic growth unchanged at 3.4 percent in 2018 and 2.5 percent in 2019.

It said its projections were contingent on Ukraine securing aid from the International Monetary Fund, which last week agreed to disburse more financial assistance provided Kyiv fulfilled certain conditions, including passing a balanced budget.

The new IMF deal worth $3.9 billion is designed to help Ukraine maintain financial stability and the trust of investors as it heads into a choppy election period next year.

Ukrainian businesses retain positive expectations regarding the level of business activity for the next 12 months, according to a recent poll of company managers conducted by the NBU.

"As in the previous polls, business activity is expected to boost by respondents of all types of economic activity. The most optimistic forecasts are in the processing industry. The business expectations index for the next 12 months was 117.2%," the NBU reported.

The high economic activity growth pace remains mainly due to improved forecasts for the total sales of own products, as well as investment expenditures on machinery, equipment and inventory. At the same time, enterprises of all types of activities, except agricultural, expect further growth of foreign investments.

The businesses pointed out a low level of stocks of finished products and the lack of its own production facilities in the event of an unexpected increase in demand. (om/ez)