Paraguay president steps down as banking crisis sows chaos

Paraguayan President Santiago Pena is set to face an impeachment trial following a severe banking crisis that left nearly half of the country's population without access to their funds. The crisis began when the Central Bank seized Ueno Bank, a bank tied to Pena, due to a significant capital shortfall. This move froze the deposits of around three million people, including pensioners, leading to widespread protests across Asuncion.

The Central Bank's action came after Pena's Ueno Bank had failed to disburse funds for a home loan, leaving many, like 26-year-old mother Nadia Gonzalez, destitute. Pena, who owned shares in a group that controlled Ueno Bank, had attempted to ease tensions by urging Central Bank president Carlos Carvallo's resignation and establishing a five-day deadline for fund returns, but these measures were not enough.

Following the seizure, long lines of people formed outside Ueno branches, stretching down the streets of Asuncion. Pena, who technically remains in power as his resignation awaits legislative approval, has apologized to the people of Paraguay and promised to ensure their peace of mind. However, opposition lawmakers accuse him of a criminal scheme aimed at draining the bank under his protection.

The impeachment proceedings, which saw unanimous approval from Congress, are expected to begin on Friday. Vice President Pedro Alliana is set to assume leadership in the interim.