Apart from "suggesting" lower rates, Erdogan blamed the Turkish central bank (CBRT) for the escalating inflation, all in light of the bank's imminent decision on rates and while consensus expects a rate hike of "at least" 600 bps.
Following the CBRT's announcement, the Turkish lira strengthened to 6.0151 against the USA dollar from a 6.45 level, gaining almost 5 percent.
The magnitude of the hike was all the more surprising given that just before the decision Erdogan had slammed interest rates as a "tool of exploitation".
Piotr Matys, emerging markets foreign exchange strategist at Rabobank, said the central bank had taken a decisive step which should allow it to gradually restore confidence in the lira.
"However, one swallow doesn't make a summer", she warned.
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He added: "He is doing very well now, but we have often had Dutch players who first played very well, but later became less". De Jong is under contract at Ajax until 2022, so any bid would have to be astronomical to be accepted.
Thursday's decree, which was published in the government's official gazette, says all current agreements in the property sector made in foreign currencies must be changed within 30 days. The depreciation has fueled higher import costs, contributing to an inflation rate that is more than three times the central bank's target, and many investors are calling for a large increase in borrowing costs to put an end to the rout.
The bank had not touched interest rates since early June with markets concerned that the policy of the nominally independent bank is being dictated by Erdogan.
The bank described the hike as a "strong monetary tightening to support price stability".
It said the policy would be "maintained decisively until inflation outlook displays a significant improvement".
The bank must balance concerns over slipping growth, which, although a robust 5.2 per cent in the second quarter on an annual comparison, showed signs of weakness with some analysts predicting Turkey is heading for recession.
"Turkey needs structural reforms to increase productivity, to decrease its dependence on short-term portfolio flows and to decrease the rigidness in the labour market".
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Otherwise, the FDA could require the tobacco makers to stop selling the flavored products that appealed to children. Altria Group Inc. and British American Tobacco Plc had the biggest one-day percentage gain in about a decade.
"As of today I have not seen the central bank fix inflation rates as they promised", Erdogan told a conference in Ankara.
He has repeatedly blamed the central bank for high inflation, which hit nearly 18% last month, its highest level since 2003. "If you say 'inflation is cause, the rate is the result, ' you do not know this business, friend".
Key rates are now at their highest level since 2004, around a year after Erdogan first came to power.
The central bank said it was returning to funding via one-week repos from Friday, having funded the market at an overnight lending rate of 19.25 per cent for the last month.
The lira has plunged in recent weeks on concerns over domestic policymaking and a crisis in relations with the United States.
The lira had weakened earlier on Thursday before the central bank decision as Erdogan's fierce criticism of the central bank and high interest raised doubts in investors' minds about how much the bank might tighten policy.
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Speaking on the issue, senior Congress leader Anand Sharma said, "Vijay Mallya has run away after looting money from banks". Jaitley said Mallya "misused" the privilege of being a Rajya Sabha MP to catch him in corridors of Parliament.