SHANGHAI/SINGAPORE, May 17 (Reuters) - China is widely

expected to hold benchmark lending rates steady on Monday, a

Reuters survey showed, although expectations are growing for a

cut in the mortgage reference rate as the authorities scramble

to boost housing.

The loan prime rate (LPR), normally charged to banks' best

clients, is calculated each month after 20 designated commercial

banks submit proposed rates to the People's Bank of China.

The survey of 33 market watchers, conducted this week, found

27, or 82% of all respondents, expect the one-year

and five-year LPRs to stay

unchanged.

Among the other six respondents, four predicted a steady

one-year LPR but a five- to 20-basis-point reduction to the

five-year tenor, while the remaining two projected similar cuts

to both rates.

Most new and outstanding loans in the world's second-largest

economy are based on the one-year LPR, now at 3.45%. The

five-year LPR, which serves as the mortgage reference rate, is

at 3.95% after a February cut to shore up the property market.

In the latest step to support property, China will allow

local government authorities to buy some homes at "reasonable"

prices to provide affordable housing, the official Xinhua news

agency said on Friday. The property sector and weak retail

continued to drag on the economy last month, even as industrial

output beat forecasts, data showed on Friday.

The central bank left a key policy rate unchanged when

rolling over maturing medium-term lending facility loans on

Wednesday, as a weak currency continued to constrain Beijing's

monetary easing efforts.

Some traders argued that the traditional dividend payment

season is looming, when overseas listed Chinese companies have

to make foreign exchange purchases to fulfil such payouts to

their offshore shareholders.

Such FX payments are expected to pile additional downside

pressure to the yuan, which has lost about 1.8% to a

resurgent dollar this year. HSBC expects $66 billion worth of

dividends are set to be made this year.

However, expectations for a cut to the mortgage reference

rate are on the rise after the authorities announced a string of

measures to rescue the beleaguered property market, long

considered a major drag on the economy.

"Further property de-stocking efforts and timely RRR/LPR

cuts as well as the push on equipment upgrade and durables

trade-in are essential, in our view, to bring back credit

demand," Citi analysts said in a note.