Paraguay's President Peña Removed from Office and Placed Under House Arrest

Paraguay's President Santiago Peña was removed from office by impeachment on Friday, 7 November, and prosecutors placed him under house arrest. The case is tied to the collapse of Ueno Bank, which has triggered a financial and political crisis in the South American country.

The Senate voted unanimously to impeach Peña, after the lower house of Congress had also backed his removal unanimously. Senators agreed that he had committed misconduct in office. Shortly afterwards, Vice President Pedro Alliana was sworn in as president and is due to serve until August 2028.

House arrest and legal proceedings

Legal proceedings against Peña began immediately after the new president took office. Under a prosecutor's order, he must remain under house arrest until he attends a meeting with a specialised unit for combating economic crime and corruption. Local media reported that the meeting is expected on Sunday. Prosecutors also issued a warrant for the arrest of central bank chief Carlos Carvallo.

Peña did not attend the Senate session and sent lawyers instead; he had earlier unsuccessfully asked for the session to be postponed by 72 hours. His lawyers argued the impeachment was no longer valid because he had announced his resignation on Thursday. The Senate and the lower house refused to accept it. Had Congress accepted the resignation, Peña would have become a senator for life as a former president, gaining parliamentary immunity.

The banking crisis

Ueno Bank is one of Paraguay's largest lenders, with 2.8 million customers, about 60% of the country's adult population. Earlier this week the central bank began proceedings to liquidate it after its capital reserves fell below the required level, cutting customers off from their accounts. The frozen accounts were also used for pension payments, and the crisis prompted protests in the capital, Asunción.

Peña had been criticised over past business ties to the Ueno holding company, in which he held shares until March 2025. He faced renewed accusations of a conflict of interest, which he denies. Carvallo had earlier been forced to resign over similar accusations linked to his previous senior role at Ueno.

Alliana promised that bank customers would receive full compensation. An opposition move to launch impeachment proceedings against him as well did not win support in Congress.