Paraguay has been plunged into an unprecedented political and financial crisis after President Santiago Peña was removed from office by Congress on Friday, 6 November 2026. The dramatic impeachment followed the collapse of Ueno Bank, one of the country’s largest digital financial institutions, which left millions of customers unable to access their savings. Peña was subsequently placed under house arrest, while Vice-President Pedro Alliana was sworn in as the country’s new leader.
Congress votes overwhelmingly to remove president
Paraguay’s Senate voted unanimously among the 44 senators present to remove Peña from office after the lower house approved impeachment proceedings the previous day.
The former president had announced his intention to resign as the banking scandal intensified. However, lawmakers proceeded with impeachment, potentially depriving him of constitutional privileges and legal protections normally available to former presidents.
Peña, who took office in August 2023, now faces a criminal investigation involving allegations of influence peddling, misuse of public office and financial misconduct. He has denied wrongdoing.
Bank collapse freezes millions of accounts
The political crisis erupted following the failure of Ueno Bank, a rapidly expanding digital lender serving approximately three million customers.
Paraguay’s central bank intervened after serious concerns emerged about the institution’s solvency, connected-party lending and regulatory supervision.
The collapse disrupted access to savings, salaries, pensions and everyday banking services across the country.
Investigators are also examining the placement of approximately $800 million in government and public pension funds with the institution.
Peña previously held financial interests in the bank’s parent company, Grupo Vázquez, although he maintains that he divested those interests in 2025.
New president inherits financial emergency
Pedro Alliana, previously Paraguay’s vice-president, was sworn in immediately following Peña’s removal.
His administration faces the urgent challenge of restoring public confidence, protecting depositors and preventing the banking crisis from spreading through the wider economy.
The central bank has begun measures to reimburse eligible depositors through the country’s deposit insurance arrangements, although considerable uncertainty remains.
Political repercussions extend beyond Paraguay
The scandal has also exposed deep divisions within the ruling Colorado Party, with former president Horacio Cartes withdrawing his support for Peña.
The removed president had maintained close political relations with US President Donald Trump and actively promoted Paraguay as an attractive destination for international investment.
The crisis now raises serious questions about financial supervision, political accountability and investor confidence in one of South America’s fastest-growing banking markets.
For Paraguay, the immediate priority is restoring access to ordinary citizens’ money while ensuring that the investigation into the banking collapse proceeds independently.
NewsHub Finance | Latin America | 7 November 2026
Paraguay has been plunged into an unprecedented political and financial crisis after President Santiago Peña was removed from office by Congress on Friday, 6 November 2026. The dramatic impeachment followed the collapse of Ueno Bank, one of the country's largest digital financial institutions, which left millions of customers unable to access their savings. Peña was subsequently placed under house arrest, while Vice-President Pedro Alliana was sworn in as the country's new leader.
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