Paraguay President Faces Removal as Financial Crisis Rocks Banking Sector
Bank failure strands customers
Ueno Bank’s collapse has disrupted access to money for roughly three million customers across Paraguay. Its app, card transactions and money transfers were suspended, leaving account holders unable to use their savings.
The lender served over 60 per cent of Paraguay’s adult population and ranked among its leading digital banks. Its holdings also included about $800 million in public-sector deposits, some connected to state bodies and the pension and health system.
Political pressure intensifies
The banking crisis has brought demonstrators to Asunción, where depositors, pensioners and workers are seeking to recover funds. The turmoil has also weakened support for Peña within his conservative Colorado Party.
The lower house backed an impeachment motion unanimously. The Senate has moved toward proceedings to decide whether Peña will be removed from office, while the president has offered to resign.
Repayments and economic risks
The government has set up a repayment process using a state deposit guarantee fund. Officials expect it to cover the entire balances of about 97 per cent of Ueno’s customers, with smaller accounts first in line for payments.
The Labour Ministry estimates that around 7,000 direct and indirect jobs are at risk because of the collapse. Investor confidence has also been shaken: Paraguay’s currency fell sharply, and sovereign bond prices declined after the political developments.
Key points
- Ueno Bank’s collapse has left around three million customers unable to access accounts.
- Peña offered to resign as impeachment proceedings advanced in Paraguay’s legislature.
- A state guarantee scheme is expected to cover full deposits for about 97 per cent of Ueno customers.
- The crisis has put roughly 7,000 jobs at risk and weakened investor confidence.