President of Paraguay Resigns Amid Banking Crisis Sparking Depositor Protests

Paraguayan President Santiago Peña resigned after nearly half the population was unable to access their savings, prompting thousands to take to the streets on Thursday in angry protests.

Congress delayed ruling on Peña’s resignation as impeachment proceedings continued, meaning he remained in office temporarily.

The central bank’s takeover of Banchuelo, a bank linked to Peña, on Tuesday froze the deposits of approximately three million people, including retirees, sparking angry demonstrations across the country.

Thousands of protesters gathered in front of the Congress building in Paraguay on Thursday to demonstrate against Peña, whose resignation remains pending.

Protesters chanted “Return the money,” according to Agence France-Presse (AFP) journalists. Previous demonstrations saw clashes with police, who used tear gas and water cannons to disperse the crowds.

Andrés Maldonado, a 21-year-old student participating in the protests, told AFP, “My family’s money is gone; we have no cash left.”

Lawmakers unanimously voted on Thursday to initiate impeachment proceedings against Peña over the crisis, accusing him of misconduct and conflicts of interest.

In a video posted on the platform X, in which he announced his resignation, the right-wing president said, “I want to apologize to the people if I fell short at any stage. I never intended to betray the trust you placed in me.”

He added that his priority was “to reassure Paraguayan citizens who placed their savings in our financial system.”

Peña later affirmed that he would “appear” before the Senate and “exercise his right to defend” himself during an impeachment trial that could take place on Friday.

The central bank explained that it took control of Banchuelo due to a severe capital shortage, aiming to “protect depositors and maintain financial system stability.”

Nadia González, a 26-year-old mother of three, told AFP, “Banchuelo agreed to give us a loan to buy our first home. But the money was never disbursed, and now we have nowhere to live.”

Long lines of people seeking to withdraw their money from Banchuelo branches stretched through the streets of the capital, Asunción, on Tuesday and Wednesday.

Peña previously held shares in the group controlling Banchuelo but sold them last year.

He attempted to ease tensions by requesting the resignation of Central Bank Governor Carlos Carvalho, who complied, and by setting a five-day deadline to return the funds. However, neither measure was sufficient.

Opposition lawmaker Raúl Benítez said, “A criminal scheme to drain the bank’s funds was carried out here, with the protection of institutions that (Peña) controlled as president.”

Derlis Maidana, a senator from the ruling party, told journalists that the goal was to conclude the trial on Friday “to reassure citizens.”