Crisis in Paraguay: 'Many low-income people placed their trust', says Brazilian who had money retained at Ueno bank

Ueno Bank branch closed in Pedro Juan Caballero. — Photo: Nádia Nicolau/TV Morena

It was an ordinary Tuesday when, in the early hours of the morning, millions of Paraguayans woke up unable to access their accounts at the Ueno bank, one of the largest in the country. The Central Bank of Paraguay had intervened in the institution.

This is the report of grain exporter Pedro Bergallo from Rio Grande do Sul, who has lived in the neighboring country for 7 years and resides in the capital Asunción.

"People were desperate. It was a huge commotion. People went to the front of the branches and, when they arrived, they found a letter stuck on the windows of the branches with a letter from the Central Bank explaining why they were closing", he says.

He himself, who produces and industrializes rice, corn and soy for export, had an account at Ueno and was unable to access part of its resources. About two days later, however, he managed to recover.

"I had an account at Ueno, I had money that wasn't very large, but it was retained and today (Thursday, 5th) I'm getting these funds returned, as is the majority of the population. I've already been able to recover the money I had in the bank", he states.

Pedro highlights that the crisis mainly impacted the country's poorest, and especially those who had Ueno as the only place where they kept their money.

"It generated a public calamity. People began to despair, especially those who didn't have a plan B or C in other financial institutions. There were many low-income people who placed their trust and their money in this bank."

In the last week, he and the country's almost 6.5 million inhabitants have been involved in a whirlwind of information and upheavals in a way that he says he has never experienced in Paraguay or Brazil.

"What is the practical result of the Ueno bank issue? Eight directors arrested, the president of the Republic impeached and the president of the Central Bank out as well. Imagine: in just three days we have this amount of events."

The situation that culminated in one of the most politically intense weeks in Paraguay in recent decades began about two years ago.

"Paraguay still had a very archaic financial market. They still used TED, you transferred at 8 am and arrived at noon. A lot of physical money was still used. And the Ueno bank came with an idea of ​​a digital bank and nothing else", he reports.

"He launches a massive campaign to create accounts in 2024 and 2025. They started to release credit with very advantageous conditions. Many people took advantage of this, including me. There were very effective discount policies in almost all stores in the country, gas stations, supermarkets, shopping malls, cinemas, they had an almost unmatched discount in all commercial establishments in the country", he adds.