Paraguay president steps down as banking crisis sows chaos
Congress put Pena's resignation on hold while the impeachment process moves forward, which means he will remain in office provisionally.
This handout picture released by the Paraguayan Presidency shows President Santiago Pena signing his resignation at the Mburuvicha Roga Presidential residence in Asuncion on November 5, 2026. (AFP photo)
________________
ASUNCION — A banking scandal that left almost half of Paraguay's population without access to their savings prompted President Santiago Pena to resign and thousands to take to the streets in angry protest Thursday.
Congress put Pena's resignation on hold while the impeachment process moves forward, which means he will remain in office provisionally.
The Central Bank's seizure of the Pena-linked Ueno Bank two days earlier froze the deposits of some three million people, including pensioners, and sparked angry demonstrations across the country.
Thousands of Paraguayans gathered outside Congress on Thursday to protest against the president, who is still technically in power.
"Give back the money," AFP journalists heard them yelling. Earlier demonstrations featured clashes with the police, who used tear gas and water cannons on the crowd.
"My family ran out of money; we don't have any cash. Santi (Pena) is a criminal; he has to go to jail," 21-year-old student protester Andres Maldonado told AFP.
Lawmakers voted unanimously Thursday to launch impeachment proceedings against Pena over the crisis, alleging misconduct and a conflict of interest in dealings with the bank to which he is tied.
The right-wing president said he would attend his impeachment trial, which is set to begin Friday, after earlier apologising to the people of Paraguay.
Pena's priority, he added, is "the peace of mind of Paraguayans who entrusted their savings to our financial system."
Demonstrators and Paraguayan police officers clash during a protest over the banking crisis and the resignation of President Santiago Pena outside the National Congress in Asuncion on November 5, 2026.
Pena's Interior Minister Enrique Riera also resigned Thursday, according to a decree published in local media, with Carlos Benitez appointed to replace him in the interim.
'Nowhere to live'
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."
Long lines of people trying to withdraw their money from Ueno branches snaked down the streets of the capital, Asuncion, on Tuesday and Wednesday.
Pena owned shares in a group that controlled the bank, but he sold them last year.
He had attempted to ease tensions by requesting the resignation of Central Bank president Carlos Carvallo, who consented, and setting a five-day limit for the return of funds. Neither measure proved sufficient.
Congress called an extraordinary session of both chambers Thursday to decide whether to accept Pena's resignation or reject it and proceed with the impeachment process.
But the session failed to reach a quorum, so the vote did not go ahead.
A later extraordinary session scheduled the impeachment trial to begin on Friday morning.
"A criminal scheme has been set up here that has dedicated itself to draining a bank, under the protection of institutions he controlled as president of the republic," opposition lawmaker Raul Benitez stated.
The aim is to conclude the trial on Friday as a way to "reassure the public," ruling party Senator Derlis Maidana told reporters.
Vice President Pedro Alliana is set to take over as leader of the South American nation.