The President of Paraguay has resigned

The President of Paraguay, Santiago Peña, was forced to resign following the sudden collapse of a bank which, having started out as a mobile app, had become the country’s largest in just three years. Thanks to the many benefits it offered, particularly to the less well-off, Ueno Bank had brought a large section of the population into the financial system, to the extent that 2.9 million Paraguayans had entrusted their savings to it: two in three families, in a country of 6.1 million inhabitants. Moreover, the bank managed 850 million dollars of public funds, including those of the Social Security Institute, which provides pensions and healthcare cover for workers. Peña, who had been president since 15 August 2023, had been decisive in driving this boom.

On Tuesday, however, the message ‘We cannot display your balance’ suddenly appeared on the bank’s app. The Central Bank of Paraguay had placed Ueno Bank into compulsory liquidation after an audit revealed that its solvency ratio had plummeted to less than half the statutory minimum. The investigations are not yet complete, but there is talk of serious irregularities and embezzlement. With the app, cards and bank transfers frozen, people took to the streets and even Congress rose up in protest, splitting the ruling Colorado Party. To deal with the emergency, Peña cancelled his trip to Madrid for the Ibero-American summit, whilst Horacio Cartes, the party leader and his predecessor as president, called for the resignation of the man he had chosen as his heir apparent.

The Colorado Party MPs had initially sided with Peña, but then abandoned him when the situation worsened. And the president gave up. “No position can take precedence over the welfare of Paraguay,” he admitted. Whilst Vice-President Pedro Alliana takes over, the Central Bank is attempting to calm tensions by allocating a refund of up to 10 million guaraní to depositors. At the current exchange rate, that amounts to 1,675 dollars.