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Trump ally Santiago Peña resigns as Paraguay's bank collapse fuels impeachment push
Paraguayan President Santiago Peña, one of the Trump administration's closest partners in South America, announced his resignation Thursday as the collapse of Ueno Bank froze the savings of about 3 million people. The lower house impeached him minutes later, but a joint session of Congress broke up without a decision on his resignation, leaving the handover to Vice President Pedro Alliana in limbo.
Ally Daily Editorial DeskUpdated:
One of the Trump administration's closest partners in South America is on his way out. Paraguayan President Santiago Peña, a conservative economist who told Bloomberg in January 2025 that the incoming Trump team was a “dream come true” for his country, announced his resignation Thursday in a video posted on X. He was brought down by the collapse of Ueno Bank, a digital lender tied to his government that froze the savings of roughly 3 million people in a nation of about 6.5 million.
Peña posted the message shortly after 1 p.m. local time, while the Chamber of Deputies was debating his impeachment. Minutes later, lawmakers voted 78-0 to impeach him anyway, with his own Colorado Party joining the opposition. The charges, including conflict of interest and misuse of pension funds, go to the Senate, where conviction requires a two-thirds majority.
“It was never my intention to betray the trust”
In this part of the address, recorded at the presidential residence in Asunción, Peña says history will judge the events of recent days, then announces: “I have made the decision to present my resignation as president of the Republic.” He says he is stepping down for “the stability of our country, social peace and the need to preserve our democratic institutions,” and that no office “can stand above the well-being of Paraguay.” He goes on: “I also want to apologize to the people if I have failed them at any point. It was never my intention to betray the trust they placed in me.”
He stopped short of accepting responsibility for the crisis, the Associated Press noted. As recently as last month, Peña dismissed warnings about Ueno as a smear campaign. Until last year he held a stake in the bank's holding company, and in 2023 he picked a former Ueno executive, Carlos Carvallo, to run the central bank that supervised it.
No word yet from the White House
The White House and the State Department had not commented publicly by Thursday evening. The Paraguayan daily Última Hora noted that leaders Peña had courted, including President Donald Trump, Secretary of State Marco Rubio and Deputy Secretary Christopher Landau, had offered him no public support. Peña met Rubio at the State Department in January 2025 and joined Trump at the Shield of the Americas summit in Doral, Florida, in March.
Under Peña, Paraguay remained Taiwan's only diplomatic ally in South America and reopened its embassy in Jerusalem in December 2024. Laurence Blair of The Paraguay Post wrote in Americas Quarterly that Peña “was arguably Donald Trump's top ally in the Southern Cone.” Gregory Ross of McLarty Associates told the same publication that “Paraguay's longstanding partnership with the United States will also remain strong.”
A bank used by 60% of adults
Ueno grew from an obscure finance company into a household name in less than five years and claimed more than 60% of Paraguay's adults as customers. It held about $800 million in public deposits, including state pension money, according to AP. Central bank inspectors found risky lending to companies tied to its owners: on a single day in September 2025, nearly $39 million went to three such firms.
The central bank seized Ueno on Tuesday after its capital fell below half the legal minimum. Eight senior executives, including founder Miguel Vázquez, have been detained. In Asunción, protesters chanted “We want your head, Peña!” and riot police fired pepper spray and rubber pellets. “We are fed up with 70 years of plunder,” protester Luis Pineda told AP.
Handover in limbo
Peña's exit is not final yet. A joint session of Congress called to accept his resignation lost its quorum mid-vote when lawmakers, most of them Colorado deputies, walked out, the dailies Última Hora and Hoy reported. The opposition argues that accepting the resignation would give Peña the lifetime Senate seat, and the immunity, that the constitution grants former presidents unless they are convicted in an impeachment trial.
Vice President Pedro Alliana, a Colorado Party veteran, is next in line and would serve out the term through August 2028. He had been expected to take the oath at 6 p.m. local time but had not been sworn in as of Thursday evening, and it was unclear when Congress would take up the resignation again. Prosecutors have also opened an investigation into complaints against both men. Bloomberg reported that the guaraní was the world's worst-performing currency on Thursday, a blow to a major soy and beef exporter long prized by investors for its stability.
Video: Santiago Peña via X. Photos: U.S. Department of State; The White House/Daniel Torok; Office of Sen. Rick Scott
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