May 6 (Bloomberg) -- The dollar may need to fall by as much as 80 percent for the U.S. to reduce its trade deficit, said Clyde Prestowitz, a former U.S. trade negotiator.

``The dollar is going to have to fall by between 50 and 80 percent,'' Prestowitz, president of the Economic Strategy Institute in Washington, said at the Asian Development Bank's meeting in Hyderabad, India.

U.S. lawmakers have blamed global trade imbalances, including the record U.S. current account deficit, on China's reluctance to let its currency appreciate more to damp global demand for its exports. Governments worldwide are concerned that the U.S. will have difficulty financing its record $805 billion current account deficit, causing a slump in the dollar.

The U.S, the world's largest importer, buys 20 percent of global goods. It needs more than $2 billion a day to pay for the deficit.

``There is a shock coming,'' Prestowitz said. ``The dollar is going to fall dramatically. The U.S. is going to have to start to buy less and sell more.''

To contact the reporter on this story: Netty Ismail in Hyderabad, India at nismail3@bloomberg.net.

Last Updated: May 6, 2006 05:53 EDT