However, in an accompanying statement, the bank expressed considerable doubts about the timing of future increases and warned the first half of 2019 is on track to post weaker-than-expected results.
It's a mixed picture, and we need more time and more data to better understand what's going on.
Recent data showed consumer spending and the housing market were soft, it said, despite strong growth in employment and labor income, with exports and business investment falling short of expectations.
Not only has the slowdown been deeper than expected, but Statistics Canada's downward revisions to growth in the first half of a year ago suggest there may have been more excess capacity going into the slump than previously thought.
The overnight interest rate stays at 1.75 per cent - where it's been since October after the central bank hiked it five times since the middle of 2017.
The loonie took a dive Wednesday morning after the Bank of Canada talked about "uncertainty" over the future path of interest rates in Canada.
Dozens Of Passengers Hurt When JFK-Bound Flight Hits Heavy Turbulence
The 10 passengers sent to a local hospital included a child and one with a possible broken leg, he said. Officials reported that 45 minutes before landing, the flight experienced extreme turbulence.
Ahead of Wednesday's rate announcement, Patterson said governing council members were confronted by softer-than-anticipated fourth-quarter numbers in the areas of business investment, exports and household spending. The weak end to 2018 and soft momentum heading into 2019 clearly has the Bank of Canada anxious about the health of the Canadian economy.
Economists agree there is little justification for a rate hike for most of 2019.
The Canadian dollar weakened to its lowest in more than two months against the greenback on Thursday following a speech from a deputy governor of the Bank of Canada, as investors raised bets that the central bank may cut interest rates this year.
"The BoC will be patient and wait for the Fed, to see if the Fed will hike at some point in the year or not, and for economic data, to see if the sharp deceleration in 4Q 2018 was really temporary", Mr Capistran also said.
The economy grew by just 0.1 per cent in the fourth quarter, for an annualized pace of 0.4 per cent, Statistics Canada said on Friday. Gone are references to achieving neutral, instead we are told "the outlook continues to warrant a policy interest rate that is below its neutral range". Consumption spending grew at the slowest pace in nearly four years, housing investment fell by the most in a decade, business spending dropped sharply for a second straight quarter, and domestic demand posted its largest decline since 2015. The Bank of Canada's next quarterly economic update is scheduled for release on April 24. The bank, however, noted that global economic prospects would improve if ongoing trade conflicts are resolved.