Santiago Peña resigns as president of Paraguay

Updated at 2.45 p.m.

Paraguayan President Santiago Peña announced his resignation on Thursday amid a financial crisis triggered by the closure of Ueno, the country’s largest digital bank. 

“History will be in the one in charge of putting the events we are currently living through in its proper perspective, but [today] I have decided to resign as president,” Peña said in a message published on his social media accounts, adding that “no position can be above” the country. 

Despite the announcement, Peña did not admit to any particular wrongdoing regarding the Ueno scandal.  

“I want to apologize if I made any mistakes. Defrauding the confidence that was placed on me was never my intention. My current priority is to bring tranquility to the Paraguayans who placed their savings in our financial system,” he said. 

The development comes as Paraguay’s Lower House was voting on whether to impeach Peña over the financial crisis. Despite his resignation, the lower house voted to move forward with a unanimous 78 votes in favor. 

The decision to impeach now moves to the Senate. They are expected to vote later on Thursday. The support of 30 senators out of 45 is required for the motion to be approved. 

Shortly before the vote on Peña, a majority of deputies voted to reject the impeachment request against Vice President Pedro Alliana (48 against 30), clearing the way for Alliana to become the new president. 

Senator Esperanza Martínez, the only leftist legislator in the Paraguayan parliament, filed a formal motion to prevent Peña from fleeing the country. “Have his passport taken away,” she requested.

Bank scandal Ueno Bank is Paraguay’s largest digital bank, used by almost half the country’s population of just over 6.4 million. On Monday, Paraguay’s Central Bank took control of the institution after detecting serious financial solvency problems.

As a result, customers found their accounts blocked and were unable to access the bank’s app, online banking services, cards or ATMs.

On Wednesday night, police used pepper spray and rubber bullets to disperse hundreds of protesters who had gathered in Asunción to demand the return of their deposits and call for Peña’s impeachment.

Many customers had deposited all their monthly income and savings in their Ueno accounts, including around 32,000 pensioners who receive their benefits through the digital bank. 

The closure has also affected government entities that held funds at the bank. It’s estimated Ueno manages approximately US$850 million in public funds.

Impeachment Many Paraguayans consider President Peña responsible for the crisis. The right-wing leader, who took office in 2023 and is due to remain in power until 2028, held shares in a group that controlled Ueno Bank but sold them in 2025.

He also appointed Carlos Carvallo, a former Ueno executive, as head of the Central Bank. On Tuesday, after the scandal broke, he announced on X that he had requested Carvallo’s resignation.

Earlier on Wednesday, a group of lawmakers had filed a request in the Lower House to initiate impeachment proceedings against Peña and Vice President Pedro Alliana.

The lawmakers filed the impeachment request against Peña “for poor performance of his duties while in office” and accused him of a “conflict of interest.” They also questioned the increase in his personal wealth.

“Two out of every three Paraguayans today cannot access their money, and Santiago Peña is primarily responsible — even his allies know that,” independent lawmaker Raúl Rubín, one of the politicians pushing for impeachment, told reporters.

Judicial investigation So far, 26 people have been charged with alleged breach of trust as part of the investigation into Ueno Bank, including all eight members of the bank’s board of directors.

Ueno’s executives were arrested on Tuesday after Paraguay’s Central Bank announced the suspension of the bank’s operations.

On Thursday, the judiciary summoned the 26 defendants to hearings to determine whether pretrial measures should be imposed.

The crisis is undermining Paraguay’s reputation as a stable economic environment in which to invest.