FEARS of hardship and social unrest are rising as the region's currencies sink, but at least one group stands to benefit from the exchange-rate volatility. Expatriates whose home currencies are depreciating but whose pay cheques are denominated in Hong Kong or United States dollars are well-positioned to take advantage of the imbalance. People who expect their home currencies to rebound might want to accelerate repayment of debts at home to take advantage of the Hong Kong dollar's strength. 'Now would probably be a good time to pay off more of those foreign-currency debts because you're getting more for your money,' said Australian Greg Cooper, director of actuarial and asset consulting at management consultant Towers Perrin. Mr Cooper's home currency is trading near a four-year low against the US dollar. This means that any Down Under payments he might have built into his Hong Kong-dollar budget go more than 20 per cent further now than they did in November 1996, when the aussie peaked. As he suggests, stepping up repayments would allow him to lock in even more advantage from the favourable exchange rate. This strategy would not work for someone whose home currency is likely to continue falling. An Indonesian expat earning Hong Kong dollars might want to take the opposite tack, slowing repayments to the minimum required. After all, the lower the rupiah goes, the cheaper his rupiah-denominated debts become. All of the above assumes, of course, that the Hong Kong dollar remains linked to the US dollar. Another Australian and the managing director of HSBC Investment Funds Hong Kong, Christopher Ryan, described debt repayment as the 'forgotten investment opportunity'. However, he warned that an accelerated payment schedule could have nasty tax consequences. 'It's a complicated equation,' he said. 'There may be a tax advantage for you not to pay off the loan.' Ian Love, still another Australian and a senior manager at Price Waterhouse Tax, confirmed this. He said Australians were allowed to offset mortgage-interest expenses against rental income. So a person who paid off his mortgage would find all of his rental income became subject to tax. Mr Love said the break-even point - the point at which any currency savings would compensate for any increased tax liability - would be difficult to determine because it depended on the vagaries of the currency markets and the details of the taxpayer's overall financial profile. Despite the risks involved in trying to second-guess the markets, Mr Cooper was ready to consider an even more aggressive tactic for taking advantage of the currency volatility: hedging. For example, he said, if you expected a Hong Hong-dollar bonus in April and would want to convert it into Australian dollars, you could buy aussie dollars forward, locking in the current exchange rate. Corporations and fund managers often hedged their currency risks, but it was unusual for individuals to do so. Mr Ryan said that was because it was a high-stakes game requiring great expertise and timely information. 'Investors need to understand the level of risk they're undertaking with any currency investment,' he said. 'It's not something you can fundamentally research. It's technical. It's short term. It's high risk. 'It's not something which the average investor should consider unless they're prepared to accept a high degree of risk.'