Paraguay’s Ousted President Placed Under House Arrest

Paraguay’s former president Santiago Peña

Paraguay’s former president Santiago Peña was placed under house arrest shortly after being impeached by the country’s Senate amid a major financial scandal and deepening political crisis.

Peña was accused of using his political influence to grant preferential treatment to Ueno Bank, a digital lender whose operations were suspended following financial irregularities.

The bank’s collapse left around 2.9 million customers unable to access their accounts, affecting approximately 60% of Paraguay’s adult population, according to reports. Customers were unable to withdraw their money or use it for basic purchases, including food and other essential items.

The crisis sparked protests across the country, with some demonstrations leading to clashes between police and protesters.

The impeachment process began earlier in the week and concluded on Friday (November 6), when the Senate voted to remove Peña from office. Vice-President Pedro Alliana was subsequently sworn in as the country’s new president.

Prosecutors have launched investigations into Peña over allegations including illicit enrichment, money laundering and abuse of power.

Investigators are examining claims that Ueno Bank expanded rapidly after receiving favourable treatment from the administration. The bank reportedly had around 2.9 million customers before its operations were suspended.

Analysts have estimated that between $800 million and $860 million in public and pension funds had been invested in the bank. Peña had also held shares worth around $1 million in the bank’s parent company before selling them in April 2025.

Public anger intensified as customers struggled to access their savings and businesses faced disruption. Retail sales reportedly fell by as much as 80%, while Peña lost support within his own political camp.

Opposition senators described the scandal as one of the largest corruption and fraud cases in Paraguay’s democratic history.

Although there were rumours that Peña might flee to Argentina, he remained at his residence in the capital, Asunción. Following his removal from office, he lost the legal protections associated with the presidency and now faces proceedings before the ordinary courts.