The lira has lost more than 40 percent of its value this year on the back of investor concerns about Erdogan's influence on monetary policy and an ongoing row with the United States that has resulted in reciprocal sanctions and trade restrictions.
There is also alarm over the direction of monetary policy under Erdogan who has railed against interest rates as "the mother and father of all evil".
There had been indications from Turkey's central bank that it would raise rates, after inflation came in at almost 18% in August, according to official data.
The currency has plunged in recent months and even after Thursday's rise was down nearly 39 percent against the dollar this year.
The Monetary Policy Committee of the Central Bank of the Republic of Turkey (TCMB) raised the political interest rate from 17.75 percent to 24 percent yesterday.
"Central Bank has announced the inflation rates for the last 16 years, but the rates have never materialized as they have declared".
"The bank also said it was returning to funding via one-week repos from Friday, having funded the market at an overnight lending rate of 19.25 percent for the last month".
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Brunson's detention saw U.S. President Donald Trump impose trade tariffs on Turkey, which triggered August's collapse in the lira.
Analysts have called for Turkey to hike its key interest rate by as much as 10% to combat inflation, which is running at 16%.
Istanbul-based economist Ozlem Derici Sengul said investors were anxious about the central bank not being able to take such action due to political pressure, so "the move built credibility". On the basis of the new regulations, existing contracts now in foreign currencies will have to be converted to the lira within 30 days.
"The crucial thing is to restore the confidence of worldwide investors that their policies are on the right track", global economist Eswar Prasad said earlier this month.
It said: "Accordingly, the committee has chose to implement a strong monetary tightening to support price stability".
Albayrak commenting on the central bank's rate hike, saying that discussions over the central bank's independence have ended.
Erdogan, a self-described "enemy of interest rates", assumed new powers under an executive presidential system following an election in June and picked his son-in-law as finance minister.
Turkey has a long tradition of carrying out business in foreign currencies to mitigate the threat of inflation and a falling lira. It is meant to be independent but has been coming under increasing pressure from Erdogan. In a bid to shore up the Turkish lira, Erdoğan's government issued a decree on Thursday banning the use of foreign currency in the sale and renting of property and the leasing of vehicles.