Paraguay's new president vows full repayment after Ueno Bank collapse

Pedro Alliana took office as Paraguay's president on Friday after Congress impeached and removed Santiago Peña, Turkey's state-run news agency Anadolu Agency reported.

Alliana pledged to make whole the millions of people hit by the failure of Ueno Bank, a digital lender, saying, "We will not leave them alone."

He made the promise in his inaugural address, moments after Senate President Basilio Nunez handed him the presidential sash.

Before the 44-0 vote, Peña sent Congress a letter of resignation, saying he was stepping down to spare the country further damage.

Peña was arrested at his home in Asunción, the capital, minutes after the Senate verdict.

The Prosecutor's Office had asked for his immediate detention on charges of conflict of interest, illegal negotiations and alleged embezzlement linked to the bank's collapse.

The trouble began earlier this week, when the Central Bank of Paraguay intervened in Ueno Bank after finding serious solvency shortfalls.

The closure has frozen the assets of 2.94 million clients, nearly half of Paraguay's population, along with major public institutions and pension funds, including the state-run Social Security Institute.

Lawmakers accused Peña of letting state agencies and public pension funds deposit hundreds of millions of dollars into the bank beyond legal limits, despite warnings about insider lending and weak collateral.

In his first official act, Alliana directed financial regulators to speed up payouts, giving priority to low-income account holders and small depositors hardest hit by the freeze.

Impeachment is a rare step in Paraguay, where Congress holds the power to remove a sitting president.

Alliana will serve out the rest of the 2023-2028 presidential term as the country works to steady its financial sector amid wider public unrest.