Nov. 7 — In a dramatic political escalation, Paraguay’s right-wing President Santiago Peña was impeached and placed under house arrest within minutes of his removal on Friday, following severe allegations of influence peddling linked to the sudden collapse of a major financial institution that left more than half the nation’s adult population locked out of their savings.
Peña’s arrest warrant was formally executed on November 6 after a fast-tracked impeachment process initiated in Congress last week culminated in his unseating. Following the legislative vote, Vice President Pedro Alliana was immediately sworn in as the nation’s new head of state, The Guardian reported.
The Attorney General’s Office has launched a comprehensive criminal probe into the ousted leader, pursuing charges encompassing illicit enrichment, money laundering, and criminal abuse of public office.
The political unraveling stems from regulatory fallout surrounding Ueno Bank, an institution that underwent rapid expansion following preferential administrative support under Peña’s governance. Financial authorities recently ordered the suspension of the bank’s operations citing extensive irregularities, freezing accounts belonging to approximately 2.9 million customers—representing nearly 60 percent of Paraguay’s adult demographic.
The account freezes paralyzed domestic liquidity, preventing millions of citizens from withdrawing funds for basic survival necessities and daily groceries. Retail sales plummeted by an estimated 80 percent, sparking widespread nationwide unrest and violent confrontations between demonstrators and law enforcement units across major urban centers.
Financial audits and investigative findings revealed that between $800 million and $860 million in state assets and public pension reserves had been directed into Ueno Bank. Peña personally held a stake valued at approximately $1 million in the lender’s parent corporation, which he liquidated in April 2025.
The disclosures prompted public outrage and eroded Peña’s support within his own ruling party. Opposition senators have characterized the episode as one of the largest financial frauds and corruption scandals in Paraguay’s democratic history.
Despite rumors that Peña had fled across the border into Argentina, the former president remained at his personal residence in Asunción. Stripped of presidential immunity by the impeachment decree, Peña now faces prosecution before ordinary criminal courts.
Source: The Guardian, Paraguayan Public Prosecutor’s Office & Congressional Dispatches, Asunción