By Sohaib Shams
Paraguay's right-wing president Santiago Peña resigned on Thursday after a political and financial crisis collapsed the country's banking system, freezing the deposits of three million customers.
Bank collapse triggers protests
The central bank ordered Ueno Bank into resolution over insolvency last Monday, leaving hundreds of thousands of families without access to money for food and daily expenses. Bank executives were arrested, and massive protests erupted across the country.
Impeachment pressure mounts
Peña, in power since August 2023, was already facing impeachment proceedings with broad support. Pressure intensified when former president Horacio Cartes, once a key ally, endorsed impeachment, stating the Colorado Party must not stand for the theft of public and pension funds.
Peña's ties to Ueno Bank
Peña had been a shareholder in Ueno Holding until early last year. The bank, bought by Grupo Vázquez in 2021, expanded rapidly under his administration, managing between $800 million and $850 million in state and pension deposits, raising conflict-of-interest concerns.
International relations
Peña, a former finance minister, was a close ally of US President Donald Trump and attended his second inauguration. US Secretary of State Marco Rubio had repeatedly praised him as a strategic partner, though neither has commented on the resignation.
Vice-president assumes office
Vice-president Pedro Alliana automatically assumes the presidency to complete the term until August 2028. The lower house unanimously approved the impeachment motion shortly after Peña's resignation; if the senate concurs, he would lose parliamentary immunity and face potential criminal proceedings.
