Paraguay's President Peña impeached minutes after resigning over banking scandal

Paraguay's lower house voted unanimously on Thursday to impeach President Santiago Peña, only minutes after he announced his resignation in a video posted on X, capping a rapid political collapse fueled by a banking scandal that has shaken the South American nation.

The crisis began on Tuesday, when Paraguay's central bank took control of the troubled Ueno Bank, citing a severe capital shortfall. The intervention left some three million depositors, many of them pensioners, unable to access their money.

Opposition lawmakers submitted a request to impeach Peña on Wednesday, accusing the right wing president of favoritism toward the bank in regulatory and pension fund decisions. Peña had owned shares in a group that controlled Ueno, though he sold them last year.

In the video announcing his resignation, Peña said: "I want to apologise to the people if at any point I failed. It was never my intention to betray the trust you placed in me." He added that his priority was "the peace of mind of Paraguayans who entrusted their savings to our financial system".

Public anger built throughout the week. Long lines of people trying to withdraw their money stretched from Ueno branches down the streets of Asuncion on Tuesday and Wednesday, while protests swept the capital on both evenings.

Hundreds of demonstrators calling for Peña's removal clashed with police, who used tear gas and water cannons against the crowds.

Peña had attempted to ease tensions by requesting the resignation of Central Bank president Carlos Carvallo, who subsequently stepped down. He also enacted a law setting a limit of five business days to return most of the frozen funds to depositors, but the measures proved insufficient to calm the unrest. The central bank said it took over Ueno to "protect depositors and preserve the stability of the financial system".

On Thursday, Peña's own Colorado Party backed his removal as Congress debated the impeachment request. "In the face of these accusations I can't pretend to be oblivious," said ruling party deputy Alejandro Aquilera during the debate. "We have more than three million Paraguayans who have been harmed, who feel betrayed, swindled, deceived."

Peña, who served as finance minister before becoming president in 2023, will be replaced by Vice President Pedro Alliana, who now takes over leadership of the country.