Paraguayan President Santiago Peña resigned on Thursday as the collapse of digital lender Ueno triggered a political crisis, leaving millions of customers unable to access their accounts and prompting lawmakers to advance impeachment proceedings against him.
Peña stepped down hours before lawmakers moved forward with impeachment proceedings, after losing support within his own conservative Colorado Party. He said in a statement posted on social media that he will appear before the Senate proceedings to defend himself.
The president said that his decision to face the proceedings was not driven by personal pride but by his responsibility to answer to the people of Paraguay.
“Being accountable and providing explanations is also a responsibility I owe to the Paraguayan people,” Peña said.
He also called for a swift resolution for customers who lost access to their accounts following the bank’s collapse, saying that establishing the facts and settling outstanding payments must proceed simultaneously.
“Clarifying the facts and resolving the payments are obligations that must advance at the same time,” he said.
Peña’s resignation also affected financial markets, with sovereign bond prices falling after the announcement. The Paraguayan guarani weakened beyond 6,500 against the United States (US) dollar before closing at 6,490, marking a decline of nearly 5 percent during the day.
The crisis began earlier this week when Paraguay’s central bank intervened in ueno, citing breaches of minimum solvency requirements by the digital lender. The fallout also led to the departure of the central bank chief at the president’s request.
Authorities issued arrest warrants for eight ueno executives, who later surrendered to authorities.
Ueno had expanded from a fintech company into a mid-sized bank with around three million customers in a country with a population of 6.5 million. The lender also managed approximately $850 million in public funds, including money associated with state institutions and pension funds.
Opposition lawmakers accused Peña of conflicts of interest, misuse of pension funds and helping protect the lender from scrutiny. The president denied wrongdoing and maintained that the matter concerned regulatory issues that the courts should handle.
