Paraguay is experiencing a political crisis that could end with the departure of President Santiago Peña. The scandal began after the closure of a bank and quickly reached Congress, where the opposition filed a request for impeachment against the president.
▶️ Context: The country is experiencing a deep political crisis after a scandal involving the failure of the "ueno" bank, which left millions of customers without access to their deposits, came to light.
ueno, which belongs to Grupo Vázquez, closed its doors on Tuesday (3), after the Central Bank began the process of liquidating the institution.
The monetary authority identified an insufficiency of resources to cover the bank's obligations, related to loans granted to companies linked to the institution.
The bank had around 3 million customers and concentrated approximately US$850 million in public deposits, including resources from the Social Security Institute.
Peña, who is also an economist, was a shareholder in the group that owns ueno until March last year.
On Thursday (5), amid political pressure, Peña announced that he intended to resign from his position. The Chamber of Deputies, however, approved the opening of impeachment proceedings against him.
In practice, Congress ignored the president's resignation. The Senate is expected to resume analyzing the impeachment against Peña this Friday (6).
See below the chronology of the crisis in the country.
Ueno Bank closes its doors
Ueno Bank in Paraguay — Photo: Marcos Landim/RPC
On Tuesday (3), the Central Bank of Paraguay liquidated the ueno digital bank after identifying insufficient resources to cover the institution's obligations.
The measure was taken after identifying problems related to loans granted to companies linked to the bank.
With the decision, the institution that had around 3 million customers and concentrated approximately US$850 million in deposits, including resources from the Social Security Institute, closed its doors.
Escalation of the crisis
On Wednesday (4), reports of failures in applications from other financial institutions began to circulate in the country and increased customer concern.
The Association of Banks of Paraguay reported that institutions were working to meet the large volume of people trying to transfer ueno accounts. The entity stated that the banking system continued to operate normally.
Opposition presents impeachment request
Congressmen debate impeachment of President Santiago Peña — Photo: REUTERS/Cesar Olmedo
The banking crisis reached Congress on Thursday (5). Opposition deputies filed a request for impeachment against President Santiago Peña and Vice President Pedro Alliana.
The accusation pointed out possible conflicts of interest, manipulation of rules and diversion of social security resources. Parliamentarians also accused the Central Bank of covering up irregularities.
Peña was a shareholder in Grupo Vázquez, ueno's controller, until March 2025. The opposition maintains that the president's relationship with the group represents a conflict of interest.
Chamber approves opening of impeachment
Still on Thursday, the Chamber of Deputies unanimously approved, with 78 votes, the opening of the impeachment process against Peña.
The request against vice-president Pedro Alliana, however, was rejected. The decision paved the way for him to assume the presidency if Peña leaves office.
Peña announces resignation
Santiago Peña, president of Paraguay since 2023, who resigned from office on November 5, 2026. — Photo: REUTERS/Cesar Olmedo/File Photo
Hours after the Chamber's decision, Peña presented a letter of resignation in a video posted on social media.
The president apologized to customers affected by the banking crisis and stated that he made the decision thinking about the country's stability, social peace and the preservation of democratic institutions.
The resignation, however, still needed to be analyzed by Congress.
Congress suspends session
Congress began analyzing Peña's resignation request on Thursday afternoon. The session was marked by a long debate between government and opposition members.
The opposition defended that the resignation be rejected and that the impeachment process continue. The parliamentarians argued that, if he voluntarily leaves the Presidency, Peña could assume a position as senator for life, with parliamentary immunity.
The government supporters argued that accepting the resignation would be the quickest way to end the crisis and allow the transfer of power to the vice president.
When they realized that they would not have enough votes to approve the president's departure, parliamentarians from the Colorado Party, Peña's party, left the plenary. The movement brought down the quorum necessary for the session to continue.
The vote was suspended, and the resignation was not accepted. As a result, Peña remained in office.
At night, the Senate held a new session to begin the debate on the president's impeachment. The process will continue on Friday (6).
Senate must resume analysis of the case
Police officers in front of the Paraguayan Congress during the extraordinary session that began judging the impeachment request against President Santiago Peña — Photo: Daniel Duarte/AFP
Congress is expected to resume analyzing the crisis this Friday. Peña also stated, in a letter published on Thursday night, that he will appear to present his own defense in the impeachment process.
The Senate is responsible for the political judgment of the president. The parliamentarians' decision could determine whether Peña will be permanently removed from office.
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