* Political pressure not seen preventing Romanian rate hike * Romania's 5-year and 10-year yields bid at four-year highs * Romanian central bank decision due around 1030 GMT By Sandor Peto and Radu-Sorin Marinas BUDAPEST/BUCHAREST, May 7 (Reuters) - Romanian government bond yields tested four-year highs on expectations that the central bank would increase interest rates further in a politically sensitive decision at its meeting later on Monday.
The ruling Social Democrat Party has become increasingly critical in recent months of the rate-tightening cycle launched by the central bank early this year.
In a salvo ahead of the meeting, a letter from the party's head on Friday slammed the bank again for the two rate rises it has delivered and for suggesting that the government's wage increase policy had caused a jump in inflation.
Romania has the highest inflation in the region, with an annual rate of 5 percent in March.
"Romania has an inflation problem ... It is hard to predict what will happen to inflation, just like in Turkey," one Budapest-based fixed-income trader said.
On Monday the Turkish central bank lowered the upper limit for its foreign exchange maintenance facility to withdraw lira liquidity.
Its Romanian peer also started to curb local currency liquidity last month through a long-unused deposit facility.
It surprised in April by not increasing interest rates but it is likely to lift them on Monday, several analysts have said, despite the political pressure.
Five out of eight analysts projected an increase of a quarter of a percentage point by the Romanian central bank to 2.5 percent, with the rest expecting rates to remain unchanged.
"We expect a 25 basis point hike and a moderate hawkish tone, which could put RON (the leu) under some appreciation pressure," ING analysts said in a note, adding that an auction of 2024-expiry government bonds on Monday could run into poor demand.
The leu firmed by 0.1 percent to 4.6555 against the euro by 0813 GMT, while the zloty shed 0.25 percent as continued buying of the U.S. dollar weighed on the region's liquid currencies.
Short-term Romanian interbank interest rates indicated expectations for a rise in central bank rates.
Romania's 10-year bond yield was bid at 4.72 percent in early trade, up 5 basis points to its highest level since June 2014, while five-year yields also touched a four-year high.
Elsewhere in the region, long-term bond yields were steady or slightly lower.
The market reaction could be neutral if the Romanian central bank increases its rates and yields could remain well-anchored in the near term, Raiffeisen analyst Imre Stephan said in a note.