Paraguay president steps down as banking crisis sows chaos

A banking scandal that left almost half of Paraguay's population without access to their savings prompted President Santiago Pena to resign and thousands to take to the streets in angry protest Thursday.

Congress put Pena's resignation on hold while the impeachment process moves forwards, which means he will remain in office provisionally.

The Central Bank's seizure of the Pena-linked Ueno Bank two days earlier froze the deposits of some three million people, including pensioners, and sparked angry demonstrations across the country.

Thousands of Paraguayans gathered outside Congress on Thursday to protest against the president, who is still technically in power.

"Give back the money," AFP journalists heard them yelling. Earlier demonstrations featured clashes with the police, who used tear gas and water cannons on the crowd.

"My family ran out of money; we don't have any cash. Santi (Pena) is a criminal; he has to go to jail," 21-year-old student protester Andres Maldonado told AFP.

Lawmakers voted Thursday unanimously to launch impeachment proceedings against Pena over the crisis, alleging misconduct and a conflict of interest in dealings with the bank to which he is tied.

The right-wing president said he would attend his impeachment trial, which is set to begin Friday, after earlier apologizing to the people of Paraguay.

"It was never my intention to betray the trust you placed in me," he said in a video posted on X announcing his resignation.

Pena's priority, he added, is "the peace of mind of Paraguayans who entrusted their savings to our financial system."

Pena's Interior Minister Enrique Riera also resigned Thursday, according to a decree published in local media, with Carlos Benitez appointed to replace him in the interim.

AFP