Paraguay Faces Political Turmoil After President’s Ouster

On November 7, 2026, Paraguay’s former president, Santiago Peña, was brought to the attorney general’s office for questioning following his removal from office. This action occurred after Congress ousted him over the collapse of a major bank. The Central Bank of Paraguay announced efforts to compensate the numerous individuals who found their bank accounts inaccessible.

Investigation and Arrest Orders

Drone footage captured by Telefuturo showed Peña arriving at the attorney general’s compound in a black SUV, accompanied by police officers. He was dressed in navy blue pants and a white shirt and was not restrained. The previous day, Paraguayan prosecutors had ordered the arrest of both Peña and former Central Bank chief Carlos Carvallo. They are under investigation for a breach of trust and other offenses related to the collapse of Ueno Bank.

Following the Senate’s unanimous decision to remove him from office, Peña was transferred to a military base as protesters assembled outside his residence. Vice President Pedro Alliana assumed the presidency and started appointing a new Cabinet.

Financial Repercussions and Compensation

The Central Bank reported that partial or full reimbursements had been issued to 1.2 million customers of Ueno Bank. Accusations against Peña include leveraging his political influence to channel vast sums of public funds into the bank, with regulatory bodies ignoring risky insider lending practices. Peña has denied all accusations.

Public Unrest and Political Crisis

“He must go, but not home. He must go to a maximum-security prison,” opposition Senator Yolanda Paredes stated, reflecting public sentiment against impunity.

The removal of Peña, an ally of former U.S. President Donald Trump, represents one of Paraguay’s most significant political crises in recent years. The nation, populated by six million people, has been predominantly led by the conservative Colorado Party since its return to democratic governance in 1989.

Peña’s resignation on Thursday was refused by Congress, which proceeded with the impeachment trial. Opposition lawmakers demanded his removal to ensure he did not retain immunity.

In a farewell message, Peña expressed his desire not to contribute to further division or instability in Paraguay. He emphasized that the country’s well-being surpassed his own personal fate.

Protests and Strikes

Public outrage continues to grow. Demonstrations have taken place, with thousands protesting against the restricted access to their savings and demanding accountability for Ueno Bank’s failure. Confrontations with the police resulted in the use of rubber bullets and pepper spray.

The largest teachers’ union in Paraguay, representing over 40,000 members, has announced plans for an indefinite national strike starting Monday. The strike aims to ensure the protection of public pension funds.

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