Police in Asunción used water cannons and tear gas near the National Congress on Nov 5 to disperse crowds protesting the failure of Ueno Bank. The clashes turned violent and paralyzed the downtown area as citizens demanded access to accounts frozen during the bank’s seizure on Nov 3. The unrest has intensified a political crisis for President Santiago Peña, as opposition lawmakers pursue a formal bid to impeach him over the collapse of the lender.
The central bank’s intervention locked roughly 3 million users out of the digital bank’s services, and those with deposits above $35,000 are reportedly at risk of losing their funds. Indicators of instability appeared in the bond market prior to the closure, with Ueno’s Eurobond yields rising from 8% to 11% on Nov 2. Those bonds are currently trading at 66% of their par value.