The central bank said the operating band for the overnight rate remains the same, as does the bank rate at 4.5 per cent.
The Bank of Canada's report said economic growth and inflation in the first part of the year had been stronger than expected, with an increased risk for inflation to stay above the bank's two-per-cent target.
"Some increase in the target for the overnight rate may be required in the near term to bring inflation back to the target," the bank noted.
In April, both total CPI inflation and core inflation were above the bank's expectations, at 2.2 per cent and 2.5 per cent respectively, the report read. As well, the Canadian economy has grown at an estimated annual rate of 3.5 per cent in the first quarter, a percentage point higher than the bank had earlier forecast.
"The bank now judges that there is somewhat greater excess demand in the economy than was thought to be the case in April," the report said.
The report said the Canadian dollar has soared above expectations because of the strong demand for Canadian commodities abroad, as well as the fact that U.S. economic activity "has come in largely as expected."
The next overnight rate target announcement is scheduled for July 10.
