"Obviously, it will have negative consequences on the economy but, I would say, it is less important if you have a hard landing than big corporate defaults due to a vicious cycle between (lira) depreciation and inflation", he said.
Currently, the interest rates are below the annual inflation level in Turkey.
Economists have argued the nominally independent bank has come under pressure from Erdogan who, only a couple of hours before its decision, launched a blistering attack on the bank and described interest rates as a "tool of exploitation".
Erdogan again described interest rates as a "tool of exploitation" but vowed that "we can not be taken advantage of".
TRT World journalist Mobin Nasir has the latest on the Turkish central bank's decision to increase interest rates to 24 percent.
The sense of doom was compounded on August 1, when the U.S. imposed selective sanctions on Turkey over the detainment of an American pastor.
The currency rose to touch 6.3673 per dollar, the highest since August 29.
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Heavy rains were forecast to extend into the Appalachians, affecting parts of Alabama, Tennessee, Kentucky and West Virginia. Forecasters predict the storm surge from Hurricane Florence could top 13 feet, enough to send water a half mile inland.
Neil Wilson, chief market analyst at Markets.com said: "This was a definite statement from policymakers, but the risk now is that the market tries to test the central bank's resolve: the horse may have already bolted".
The fall in the value of the lira in recent months has pushed up the price of everyday items in Turkey and raised fears the country is sliding into an economic crisis.
However, speaking to Middle East Eye, Julian Walker, a director at Spot Blue, a UK-based company that specialises in property in Turkey, said: "I don't think this move will be awful for business. It's only really going to be a bit problematic if you're repatriating to the country you came from".
It remains to be seen how the news will sit with Erdogan, however.
Erdogan appointed as the fund's general manager Zafer Sonmez, head of the Turkey regional office of the Malaysian sovereign wealth fund Khazanah Nasional.
Last September, Erdogan said the fund had failed to realize a "targeted and desired" outcome. Financial markets have grown increasingly concerned that Turkey is in danger of adding its name to the list of countries seeking a rescue loan from the International Monetary Fund.
The fund was established in August 2016 and tens of billions of dollars worth of state assets including - wholly state-owned - Ziraat Bank were transferred to it in 2017.
Such funds can be used for large projects, maintaining pensions and national welfare programmes, or in times of crisis.