Paraguay Banking Crisis Topples Santiago Peña, Sparks Political Turmoil in Paraguay

Trump ally’s removal raises questions about Paraguay’s political future

Peña’s removal has also attracted attention in Washington because of his close relationship with the Trump administration.

A member of Paraguay’s conservative Colorado Party, Peña had aligned himself with several of Trump’s priorities, particularly on immigration and regional security. Earlier in 2026, he attended a White House summit in Miami alongside other Latin American leaders who maintain close relations with the US president.

His government also developed cooperation with Washington on defense and regional coordination, including a safe third-country agreement allowing asylum seekers from the United States to be transferred to

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