Paraguay President Santiago Pena resigns after bank takeover sparks protests, threatens millions of depositors

Asuncion: Paraguayan President Santiago Pena announced his resignation on Thursday after the takeover of a bank linked to him blocked millions of people from accessing their money.

Protests have roiled the South American nation after its central bank took control of Ueno Bank on Tuesday, citing a severe capital shortfall.

Opposition lawmakers on Wednesday submitted a request to impeach Pena over the crisis, accusing him of favoritism toward the bank in regulatory and pension fund decisions.


"I want to apologize to the people if at any point I failed. It was never my intention to betray the trust you placed in me," the right-wing president said in a video announcing his resignation on X.

His priority is "the peace of mind of Paraguayans who entrusted their savings to our financial system," he added.

'Swindled'

Some three million depositors, including pensioners, lost access to their money.

Long lines of people trying to withdraw their money from Ueno branches snaked down Asuncion's streets on Tuesday and Wednesday, while angry protests swarmed the capital on both evenings.

Paraguay's Central Bank said it took over Ueno due to a severe capital shortfall, in order to "protect depositors and preserve the stability of the financial system."

Pena owned shares in a group that controlled the bank, but he sold them last year.

His own Colorado Party backed the president's removal on Thursday, while Congress was debating the request.

"In the face of these accusations I can't pretend to be oblivious," said ruling party deputy Alejandro Aquilera during the debate.

"We have more than three million Paraguayans who have been harmed, who feel betrayed, swindled, deceived," she said.

Pena had attempted to ease tensions by requesting the resignation of Central Bank president Carlos Carvallo, who subsequently stepped down.

He also enacted a law that set a limit of five business days to return most of the funds to depositors.

But the measures proved insufficient, with hundreds of demonstrators in Asuncion calling for his removal and clashing with police, who used tear gas and water cannons on the crowd.

Pena served as finance minister before becoming president in 2023.

Vice President Pedro Alliana will now replace him to lead Paraguay.