Paraguayan President Santiago Peña announced his resignation on Thursday, Nov. 5, 2026, following the collapse of a digital bank with ties to his administration. Minutes after the announcement, the lower house of the Paraguayan Congress voted 78-0 to impeach Peña. The crisis began after the central bank seized Ueno Bank due to a solvency crisis, which froze the savings of depositors and led to widespread protests in the capital, Asunción.
Peña, a former International Monetary Fund economist, stated in a video posted to X that he was stepping down to preserve "the stability of our country, social peace and the need to preserve our democratic institutions." Despite the resignation, congressional leaders moved forward with impeachment proceedings. Vice President Pedro Alliana was expected to be sworn in later Thursday. Opposition senators argued for a full trial to prevent Peña from becoming a senator for life, a position that provides legal protections.
The collapse followed a central bank investigation that found Ueno Bank had engaged in risky lending to companies linked to its owners and had incorrectly reported expenses as assets. These corrections reduced the bank's capital to less than half the legal minimum. On Thursday, a judge ordered six Ueno executives to be jailed pending trial, and prosecutors charged 27 officials with breach of trust and attempted fraud. Defense attorney José Fernández Zacur stated that senior board members were not responsible for individual lending decisions.
The economic impact became visible as the national currency, the guaraní, fell nearly 4% against the U.S. dollar on Thursday, totaling a nearly 7% loss for the week. For many households, the freeze on digital transfers and cards has disrupted the ability to pay for groceries and basic services. Public trust in the financial regulatory system has been tested, as Ueno Bank held approximately $800 million in public deposits, including funds from state pensions, the national health fund, and hydroelectric dam operators.
What happens next depends on the Senate's handling of the impeachment charges and the timeline for deposit recovery. Under a law passed Wednesday, the state guarantee fund is required to repay insured depositors within five business days. Protesters have vowed to continue demonstrations in Asunción to ensure the former president loses his legal immunity. The transition of power to Vice President Pedro Alliana is expected to occur following the official acceptance of Peña's resignation by congressional leaders.