U.S. PAYMENTS GAP TO PERSIST, EX-FED CHIEF SAYS The dollar will decline over the next two to three years, but this is unlikely to result in a complete reduction of the U.S. current account deficit, said Anthony Solomon, chairman of S.G. Warburg (USA) Inc and former president of the Federal Reserve Bank of New York. In a presentation to the Japan Society, Solomon said without elaboration that he expects a "significant decline in the dollar," within the next three years. "The dollar will fall more, but the current account deficit will stop being reduced when it reaches its structural core," he said. Solomon described the structural core as about one-half of the current 150 billion dlr annual deficit. He cited several factors which will prevent an elimination of the deficit. For one thing, it is unlikely that there will be any new investment in those manufacturing industries that shrank when the dollar was at uncompetitive levels, he said. In addition, he said that the U.S. has an increased propensity to import in order to satisify consumer tastes. Solomon forecast inflation at 4.5 pct by year-end, but said it could be kept below five pct in the medium-term if oil prices are stable and commodity values remain low.