The appointment of Berat Albayrak boosted expectations the president - who wants to see lowering borrowing costs to spur credit growth and new construction - will look to exercise greater influence over monetary policy.
Countering a trend popular within Turkey, especially within the retail sector, the government said any contracts previously made in foreign currency but which were now in effect must be converted into lira within 30 days.
Several emerging markets have confronted the same struggles, dogged by a strengthening US dollar that makes it more hard for countries such as Turkey to pay back hefty external debt. Inflation also soared this month to a 15-year high of nearly 18%.
Turkish President Recep Tayyip Erdogan on Wednesday took the wheel of his country's sovereign wealth fund, in his latest attempt to steady an economy in crisis, state media reported. The lira has lost roughly 40 percent of its value against the USA dollar this year, and its inflation rate sits at about 18 percent.
Turkey's central bank, which described the hike as a "strong monetary tightening to support price stability", had left interest rates untouched since early June, causing markets to question just how independent bank policy was from the country's president.
Turkey's currency and inflationary troubles are also compounded by the threat of steel and aluminium tariffs from the U.S. as well as sanctions over the detention of an American evangelical pastor.
Economists have warned of a possible recession in Turkey after a slowdown in the second financial quarter of 0.9 percent, compared to 1.5 percent in the first quarter of this year.
In one direction it could hear the siren call of investors craving higher interest rates to draw a line in the inflationary sand and stop the lira's collapse. He repeated however, his belief that interest rates should be cut, calling them an "instrument for exploitation". "I'm saying let's cut these high interest rates".
"The central bank is independent and makes its own decisions", he said.
On Thursday he ruled that property sales and rental agreements must be made in lira, putting an end to such deals in foreign currencies.
In a statement, the central bank noted that the local economy was weakening while inflation was rising.
A "tight stance in monetary policy will be maintained decisively until inflation outlook displays a significant improvement", it added.
Brett Diment at Aberdeen Standard Investments said raising rates would put "Turkey on the slow road to recovering some monetary policy credibility, and that is critical". "If you say ´inflation is the cause, the rate is the result´, you do not know this business, friend", he added.