President Santiago Peña resigned on Thursday after the Central Bank seized Ueno Bank — a bank linked to him — two days earlier due to a severe capital shortfall. The intervention froze deposits of some three million people, including pensioners, in a move the Bank said was needed to “protect depositors and preserve the stability of the financial system”. Congress has put Peña’s resignation on hold while impeachment proceedings move forward, meaning he provisionally remains in office. Lawmakers voted unanimously Thursday to launch impeachment over alleged misconduct and conflict of interest in dealings with Ueno.

 Peña owned shares in a group that controlled the bank, but sold them last year. Peña said he would attend his impeachment trial, set to begin Friday morning, with the aim to conclude it Friday to “reassure the public”, according to ruling party Senator Derlis Maidana. In a video on X announcing his resignation, Pena apologized: “It was never my intention to betray the trust you placed in me”, adding his priority is “the peace of mind of Paraguayans who entrusted their savings to our financial system”. An extraordinary joint session of Congress Thursday to decide between accepting the resignation or proceeding with impeachment failed to reach quorum. A later session scheduled the trial. Opposition lawmaker Raul Benitez alleged: “A criminal scheme has been set up here that has dedicated itself to draining a bank, under the protection of institutions he controlled.”

Vice President Pedro Alliana is set to take over. Interior Minister Enrique Riera also resigned Thursday and was replaced interim by Carlos Benitez. Peña had tried to ease tensions by securing the resignation of Central Bank president Carlos Carvallo and setting a five-day limit for return of funds, but it was insufficient. The freeze sparked angry nationwide protests. Thousands gathered outside Congress Thursday chanting “Give back the money”, after earlier clashes where police used tear gas and water cannons. Long lines formed at Ueno branches in Asuncion Tuesday and Wednesday. Protesters described hardship, including 21-year-old student Andres Maldonado, who said his family ran out of money, and 26-year-old mother Nadia Gonzalez, whose approved home loan was never disbursed: “now we have nowhere to live.” (Bssnews)