In a bid to stabilize Turkey's faltering currency, the bank boosted interest rates by more than 6 percentage points, to 24 percent, even though Erdogan has vowed keep them steady - or even lower them.
He criticised the central bank, saying it had consistently miscalculated inflation targets and again portrayed the currency crisis as a foreign conspiracy.
Turkish Airlines is regarded as one of Turkey's crown jewel assets and its size is set to grow further with the move to a giant new Istanbul airport as its main hub in October. But he said Turkey would weather the attack and stay its course.
"Yesterday the central bank carried out the much talked about interest rate hike".
The Turkish chief despatched the forex down spherical 2 percent ideal two hours sooner than the bank's decision, rattling markets by vocally criticizing the central bank for missing inflation targets and reiterating his conception that ardour fee hikes trigger label increases.
In a statement, TCMB's monetary policy committee said Turkey's economy was weakening while inflation was rising, hence the reason for its action.
Earlier in the day, Erdogan criticized bankers for causing a depreciation of the currency.
The Turkish currency lost almost a quarter in value against the greenback in August. Australian shares were up 0.6 percent, Seoul's Kospi rose 1.4 percent and Hong Kong's Hang Seng gained 1 percent.
Erdogan also noted that Turkish exporters should take advantage of the current levels in foreign exchange rates to increase the volume of exports, and production and employment as well.
Guillaume Tresca, senior emerging market strategist at Credit Agricole said the economy needed to slow down because it was overheating and that an interest rate rise was needed to cap lira depreciation. "If you say ´inflation is the cause, the rate is the result´, you do not know this business, friend", he added.
"The commercial banks were probably switching to more liquid assets, given what has happened to the lira", Jason Tuvey, a senior emerging markets economist at Capital Economics in London said by phone on Friday. Subsequently, the lira lost about 25 percent of its value while Turkish authorities have taken a series of steps created to support the currency, with the central bank taking liquidity measures and the banking watchdog limiting derivative transactions.
But the day's big move was Turkey's lira which swung nearly 6 per cent in a wild few hours. This article is strictly for informational purposes only.