Source : Perth Now news
Paraguay’s financial and political crisis has deepened after lawmakers removed President Santiago Peña from office and prosecutors issued an arrest warrant for him over his alleged involvement in a banking scandal.
The Senate voted unanimously to impeach Peña after the lower house had also backed his removal without opposition, according to footage broadcast on Paraguayan television.
Vice President Pedro Alliana was sworn in as the country’s new leader shortly after Peña’s removal. He is set to serve until August 2028.
Legal proceedings against Peña began almost immediately after Alliana was sworn in.
Under the prosecutor’s order, Peña must remain under house arrest until he appears before a specialist unit for economic crime and corruption. According to local media, this is expected to happen on Saturday.
Footage broadcast by the Paraguayan news portal ABC showed police officers outside Peña’s home.
An arrest warrant was also issued for central bank chief Carlos Carvallo.
During the impeachment proceedings, senators agreed that Peña had committed misconduct in office.
Peña did not attend the Senate hearing, instead sending his lawyers to represent him. He had earlier unsuccessfully requested a 72-hour postponement.
His lawyers argued that the impeachment proceedings were no longer valid because Peña had already submitted his resignation. However, the Senate and lower house had refused to accept it.
Had Congress accepted his resignation, Peña would have become a senator for life as a former president, granting him parliamentary immunity.
Paraguay has been gripped by a financial crisis with political repercussions since Ueno Bank, which is at the centre of a scandal, became effectively insolvent, leaving millions of people fearing for their savings.
The central bank launched proceedings to wind down the lender after its capital adequacy ratio fell below half the required minimum. Customers temporarily lost access to their accounts.
The digital bank had grown into one of Paraguay’s largest lenders in recent years.
Peña maintained business ties with Grupo Vázquez, which included Ueno Bank, until March 2025. He has consistently denied allegations of conflicts of interest.
The Attorney-General’s Office opened several investigations into Peña on Thursday, focusing on the supervision of the bank, its winding-down process and the provision of public funds to the lender.
Prosecutors also confirmed the arrests of bank executives.
Carvallo was forced from his post after facing allegations of a conflict of interest over his previous work at Ueno Bank.
Interior Minister Enrique Riera, chief of staff Javier Giménez and presidential legal adviser Roberto Moreno have also resigned.
New president economically liberal and conservative
Alliana, 52, is a businessman regarded as economically liberal and conservative. Like Peña, he belongs to the Colorado Party, which has governed Paraguay for decades.
