UFA is the abbreviation for United Financial Agency. The head office of the association is located in Geneva. UFA was established in 1993 under the Act on Accession of the Countries Containing Countries for the Benefit of the Less Developed Countries. The association is responsible for coordination of the foreign trade with the member countries of the Association of Southeast Asian Nations (ASEAN). The aim of UFA is to promote closer economic cooperation among the members of the association.
The association has its branches in almost all European countries including in many countries of Europe, Russia, Bulgaria, Poland, Austria, Germany, Spain, Romania, Hungary, Greece, Italy and the United Kingdom. The financial and monetary policy of ufa mean that the financial transactions are carried out according to the rules of the foreign exchange market, without considering the currency of each country involved. The term ufa mean ‘a currency not equal to’ in English, but means ‘a unit of currency equivalent to’ in Russian.
The main goals of ufa are to harmonize the trade between the countries and promote financial market information exchange, which will result in the improvement of the economic performance of these countries. The goals of ufa include reducing barriers to trade, liberalizing the internal trade, promoting credit facilities and opening a fair and liquid market for the transfer of payments. The term ufa refers to a set of agreements and texts that governed by the rules and regulations of the Association of Southeast Asian Nations (ASEAN), European Union (EU) and World Trade Organization (WTO).
The term ufa does not mean ‘unlimited freedom of currency’. It just means that the Association makes every effort to make the rules of the exchange market uniform across its members. This is done through a consensus system. A decision is reached by a majority in the group. For example, a decision to allow a credit default risk is taken by a majority of members. This means that there should be no discrimination against any member country if it faces a high default risk in the foreign exchange market.
In order for the rules of the ufa to be effective, there are various measures. The most important one is to protect member countries from the risks that they will have to face in the foreign exchange market. This can be done by maintaining adequate controls over the activities of their monetary and fiscal policy. Such a policy will protect them from experiencing an unfavorable economic adjustment. Another important measure is to maintain stable exchange rates so that members of the Association do not face economical pressure due to the fluctuation of the exchange rate.
There are some rules that are applied throughout the whole Association. These rules ensure that the Association’s policies and rules benefit all its members equally. This ensures that the market is fair for everyone, and thus the currency of the ufa becomes highly valuable in the foreign money market.