Paraguay’s 47-year-old President Santiago Peña has offered to resign following a major banking crisis that has left nearly half the country’s population unable to access their money.
The former International Monetary Fund (IMF) economist and finance minister, who became the youngest-ever president of the South American nation, now faces an uncertain political future as he awaits parliamentary approval of his resignation. Impeachment proceedings against him are also scheduled to begin on Friday, reports AFP.
Peña’s political crisis unfolded after Paraguay’s Central Bank intervened on Tuesday and took over Ueno Bank over severe capital shortfalls. The move left nearly three million depositors, including pensioners, unable to access their accounts, triggering angry protests across the country.
Although Peña sold his shares last year in a group that controlled the financial institution, lawmakers seeking his impeachment have accused him of a conflict of interest. They allege that he favoured Ueno Bank through regulatory decisions and the allocation of state pension funds.
The controversy sparked a strong backlash within Peña’s own ruling conservative Colorado Party, which has governed the country for nearly eight decades. Former president and party leader Horacio Cartes backed the impeachment of his former protégé, writing on social media on Thursday: “We will not side with the plundering of public, private, and pensioners’ funds”.
Echoing the criticism, ruling party Senator Oscar Salomón told reporters that Peña “has betrayed the country for money”. In response, Peña posted a video message on X, asking citizens for forgiveness and saying: “It was never my intention to betray the trust you placed in me”.
Despite the political turmoil, Peña’s departure is unlikely to change Paraguay’s close diplomatic ties with the United States, as Vice-President Pedro Alliana, also a member of the Colorado Party, prepares to take over.
Peña took office in 2023 after winning the presidential election comfortably with 42.7% of the vote, against 27.5% for his centre-left rival.
During his presidency, Peña strongly supported US President Donald Trump’s Latin America policies and brought Asunción closer to Washington. Under his administration, Paraguay joined Trump’s anti-cartel Shield of the Americas coalition in March.
He also maintained a firm pro-Taiwan stance despite China’s territorial claims and emerged as a strong supporter of Israel. He sought to relocate Paraguay’s embassy from Tel Aviv to Jerusalem, a highly contentious move as the disputed territory is not recognised as Israel’s capital.
On social issues, Peña defended traditional family values, opposing abortion and gay marriage while defining a family as consisting of “mother, father and children”.
He also faced criticism for praising the “stability” under former dictator Alfredo Stroessner, who ruled Paraguay from 1954 to 1989. However, Peña acknowledged that “unfortunately, many freedoms and human rights were curtailed” under the regime, during which up to 3,000 people were killed or disappeared.
Born in Asunción on 16 November 1978 into a well-to-do family, Peña rose to prominence as a technocrat and academic.
He married his wife, Leticia Ocampos, following an early teenage pregnancy, a period he once described as a “difficult time” in his life. With support from both families, he continued his studies at Columbia University in New York before joining the IMF’s Africa Department in Washington.
He worked as an official at Paraguay’s Central Bank during the 2000s and later served on its board of directors before entering government as finance minister in 2015.
