MercoPress. South Atlantic News Agency

Pressure mounts on Paraguay’s Central Bank over doubts about some lenders’ solvency

“We ask the Central Bank to report on the solvency of all entities that received facilities in merger processes. That way doubts will be cleared,” the association said

The Association of Banks of Paraguay, which groups 14 private lenders, on Sunday asked the Central Bank of Paraguay to report on the solvency of institutions that received facilities in merger processes, days after senators from the ruling party and the opposition called on President Santiago Peña to remove the institution’s leadership.

“We ask the Central Bank to report on the solvency of all entities that received facilities in merger processes. That way doubts will be cleared and, if any entity does not comply, action can be taken in time,” the association said in a statement released by local media. It added that the soundness of lenders cannot rest on “differential treatment”.

The request comes after the Central Bank reported to the Senate, at its request, on the conduct of several private lenders, including Ueno Bank, which according to local media has attracted substantial public deposits in just a few years. The association considers that report “incomplete” and says concern persists over the credit exposure of a private bank, which it does not identify, to companies in its own group.

On Wednesday, senators from several parties urged Peña to dismiss the Central Bank’s board, and in particular its president, Carlos Carvallo. Days earlier, the president had publicly backed the institution and called for calm amid rumours about Ueno Bank. Neither the Central Bank nor the lender has commented on the association’s statement.

In 2024, Peña described as a “media campaign” and “lies” reports on the purchase by the Social Security Institute of 250 billion guaraníes in Ueno Bank bonds. The bank’s head, Juan Manuel Gustale, said at the time that Peña was a shareholder in Ueno Holding and not in the bank, and the president said in April 2025 that he had sold those shares.