Paraguayan President Santiago Pena announces decision to resign

Paraguay's President Santiago Pena says he is stepping down as continued protests rocked capital city Asuncion, days after the collapse of Ueno Bank, a prominent digital lender with ties to his government.

Moments later, the country's Congress declines to accept his resignation with the lower house voting unanimously to impeach him.

Pena announced his resignation as president on X Thusday afternoon, saying he quit to preserve Paraguay's stability, social peace and democratic institutions.

In a recorded address, Pena offered an apology to the people with remarks that it was never his intention to betray the trust they had placed in him, but stopped short of explicitly accepting responsibility for the banking crisis, which erupted after Ueno Bank entered an insolvency process.

The bank that exploded from an obscure finance firm to a household name claims to have 3 million customers, equivalent to about 60% of Paraguay's adult population.

The central bank seized it this week due to significant capital shortfall, beginning a process to transfer deposits and recoverable assets to other banks before liquidating what remained.

Ueno's app, cards and transfers went dark. All of its operations were effectively frozen.

Desperate depositors besieged locked bank branches while a rush to open alternative accounts crashed competitor apps on Wednesday.

Since the bank scandal broke, protestors in Asuncion have gathered in public squares to demand justice and accountability.

Pena has pledged in his address that his greatest wish is for the funds of depositors to be returned.

The former International Monetary Fund economist, who was a shareholder until last year in the company that owned Ueno, is under criminal probe after lawmakers blasted him for conflicts of interest and misconduct.

Paraguay's attorney general has ordered investigators to examine authorities' oversight of the bank, their handling of its failure and the placement of public funds in the lender.

Meanwhile, a special congressional session convened to address Pena's resignation was adjourned in favour of continuing an impeachment process in the Senate that could remove him from office.

Pena is expected to present his defence at a special session scheduled for Friday, according to a Reuters report.