Paraguay president ousted after banking crisis
Paraguay’s right‑wing president was impeached and placed under house arrest after a banking crisis that froze accounts for 2.9 million people, roughly 60% of adults.
At a glance
- Paraguay’s right‑wing president Santiago Peña was impeached and placed under house arrest after a banking crisis.
- The crisis froze bank accounts of 2.9 million people, about 60% of adults, preventing basic purchases.
- Opposition senator Rafael Filizzola called it one of the biggest corruption scandals since democracy returned.
Paraguay’s right‑wing president Santiago Peña was impeached by Congress on Friday and placed under house arrest minutes later, amid a banking crisis that froze accounts for 2.9 million people, about 60% of the adult population.
Impeachment and arrest Congress voted to impeach Peña on Friday, concluding the proceedings just before a judge issued an arrest warrant. Prosecutor Elena Fiore Franco said Peña voluntarily allowed officers into his home and complied with all procedural requirements.
Banking crisis details The crisis centered on Ueno Bank, whose accounts were frozen after irregularities, leaving 2.9 million customers unable to withdraw money or pay for basics such as bread and water. Nationwide protests erupted, some turning violent, and retail sales dropped by as much as 80%. The public prosecutor opened an investigation on Thursday into alleged illicit enrichment, money laundering and influence peddling, while vice‑president Pedro Alliana was sworn in as the country’s new leader.
Peña appointed former Ueno CEO Carlos Carvallo Spalding as central bank head, and the arrest warrant also names Spalding. Peña held roughly US$1 million in Ueno Holding shares bought in 2019 and sold in April 2025, while pension funds linked to his administration invested $800 million‑$860 million in the bank.
Peña lost his party’s support, and opposition senator Rafael Filizzola described the case as one of the biggest corruption scandals since democracy returned and the largest fraud carried out from political power in the democratic era. Rumours that Peña had fled to Argentina added to the turmoil.
Questions and answers
- Why was Paraguay’s president placed under house arrest?
- He was impeached by Congress on Friday and the court ordered house arrest after an investigation into alleged illicit enrichment and influence peddling.
- How many people were affected by the bank account freeze?
- About 2.9 million people, roughly 60% of the adult population, were unable to access their accounts.
- What role did the former central bank head play?
- Carlos Carvallo Spalding, a former Ueno CEO, was appointed central bank head and was named in the arrest warrant for his involvement.
