Paraguay Senate votes to impeach Prez Santiago Peña over bank collapse; VP sworn in

Asuncion : Paraguay’s Senate on Friday (local time) has voted to impeach and remove President Santiago Peña from office, stripping him of his immunity amid an escalating criminal investigation into the collapse of a prominent bank tied to him, CNN reported.

Following the vote, Vice President Pedro Alliana was sworn in as the country's new head of state to lead the executive.

The Senate voted 44 to 1 on Friday in favour of ousting Peña, following a fast-tracked trial. The political crisis was triggered after Ueno Bank—a financial institution with which Peña had established business ties—was abruptly shuttered overnight due to a severe solvency crisis, cutting off millions of depositors from their savings, CNN reported.

Paraguay’s Attorney General has since opened three separate criminal cases against Peña and several former officials in connection with the financial implosion, as per CNN.

Peña had preemptively announced his resignation in a video statement on Thursday as lawmakers debated charges against him. The country’s Chamber of Deputies nevertheless voted unanimously to initiate impeachment proceedings, accusing him of "serious and systematic dereliction of duty."

"I have made the decision to submit my resignation from the Presidency of the Republic. I do so with the stability of our country, social peace, and the need to preserve our public institutions in mind," Peña said in a statement released on social media, adding that he stepped aside to reassure citizens "who entrusted their savings to our financial system."

Peña was not present in the chamber during the final vote. His defence attorneys, Adolfo Ferreiro and Ricardo Preda, represented him after the Senate rejected a request for a 72-hour extension to prepare their legal arguments.

Peña, 44, took office in August 2023 for a five-year term as one of the youngest presidents in Paraguay’s history, representing the right-wing Colorado Party. A former economist, he previously served as a director of the Central Bank and as Finance Minister between 2015 and 2017.

Internationally, Peña has been regarded as one of the closest Latin American allies of US President Donald Trump’s administration, frequently aligning with US policy positions on security and regional immigration.

Reacting to the rapid political transition in Asuncion, a US State Department spokesperson affirmed that Washington's bilateral relations with Paraguay remain intact.

"We remain committed to the enduring relationship between the American and Paraguayan people and look forward to continuing our close cooperation on shared priorities," the spokesperson said, according to CNN.