Paraguay Central Bank Board Crisis: What Is at Stake
EXPLAINER · PARAGUAY
Key Facts
- —The country Paraguay is a landlocked South American exporter of soy, beef and hydropower, governed by President Santiago Peña of the conservative Colorado Party.
- —Why it matters The central bank guards the currency and supervises every bank. A fight over its leadership tests the stability Paraguay sells to foreign investors.
- —Why now On Wednesday 14 October, ruling-party senator Gustavo Leite urged Peña to replace the whole board and the superintendent of banks.
- —What happened Leite called the bank’s answers to a Senate inquiry on ueno bank incomplete. An opposition senator filed a motion the same day urging removal of the entire board.
- —The numbers The board has five members. On 13 October the lower house rejected a motion against the bank’s president by 31 votes to 26 in the official count, though one tally put the votes against at 30.
- —What it means for you Investors in Paraguayan banks, bonds and businesses should watch whether Peña replaces the board or stands by it.
- —Still open Whether Peña acts, whether the Senate votes on the motion, and what the central bank’s proceeding against ueno finds.
- —Power Index Paraguay ranks 10th of 14 in The Rio Times Latin America Power Index, with 36.0 points (October 2026 edition).
The Paraguay central bank board faces calls for its removal from both a ruling-party senator and the opposition. On Wednesday 14 October, Senator Gustavo Leite urged President Santiago Peña to replace all five board members and the superintendent of banks.
The dispute centres on how the Banco Central del Paraguay (BCP) supervised ueno bank, a digital lender. For US readers, it matters because Paraguay markets itself to foreign investors on its record of economic stability.
What the Paraguay Central Bank Board Does
The BCP runs under Law 489 of 1995, its charter law, which Law 6104 rewrote in July 2018. Its main goals are to keep the currency’s value stable and to promote the efficiency, integrity and stability of the financial system.
The board is made up of a president and four directors, all named by the executive with the Senate’s prior agreement. The bank’s president serves a term that matches the president of the republic’s, while directors serve staggered five-year terms.
The current head is Carlos Carvallo Spalding, an economist and former BCP director who took office on 7 September 2023. The other members are Carmen Marín, Liana Caballero, Miguel Ángel Mora and Marco Aurelio González, according to the bank’s website.
Day-to-day bank supervision is run by the superintendent of banks, currently Holger Insfrán. The executive picks the superintendent from a shortlist of three drawn up by the board, for a five-year term.
Why a Senator Wants the Whole Board Out
The trigger is a central bank report to the Senate on ueno bank and other lenders, delivered in early October. Leite said the Senate had asked 31 questions and that eight to ten went unanswered, Radio Monumental reported.
“The official document is incomplete, unsatisfactory to my mind, and raises more doubts than certainties,” Leite said on Wednesday. He told ABC Color that a complete change of leadership was the only way to reassure the financial system.
He also said business leaders had “implored” Peña to change the board at an unpublicised meeting at the presidential residence on Friday 9 October. No official account of that meeting has been published.
Leite argued that a request from Peña for resignations would be faster and more honourable than a removal process. “From now on, everything that happens in the financial system is the exclusive responsibility of the president,” he said.
Asked whether he had a personal stake, Leite said he owns no shares and has no investments in any bank. He added that, like most Paraguayans, he only has debts with banks.
Background on the report itself is in Paraguay Senate Gets 31-Page Report on Ueno Bank Loans. That earlier piece covers what local papers said the sealed document contained.
Who Is Pushing and Why It Is Political
Leite is a Colorado Party senator and a loyalist of former president Horacio Cartes, who leads the party and its Honor Colorado faction. He was industry and commerce minister under Cartes from 2013 to 2018.
He served as Paraguay’s ambassador in Washington from July 2025 and returned to the Senate in late July 2026. Since then he has openly criticised Peña’s government, even though both men belong to the same party.
The push comes as the ruling party splits over the 2028 race. Cartes this week dropped Vice President Pedro Alliana as his presidential pick in favour of Juan Carlos Baruja, as covered in Paraguay VP Defies Cartes on 13 October.
The opposition is pressing too. Senator Rafael Filizzola of the opposition Progressive Democratic Party (PDP) filed a draft declaration on 14 October urging the executive to start removing every board member for poor performance.
The text cites Article 17(c) of the charter law and asks for a review of how the bank policed loans to related parties. It is not binding, and by Wednesday evening no outcome had been reported from that day’s extraordinary Senate session.
In the lower house, a similar motion against Carvallo failed on Tuesday 13 October, with lawmakers close to Peña voting it down. The chamber’s count was 26 votes in favour and 31 against, although RDN’s own summary put the votes against at 30.
The Ueno Bank Questions
Ueno is a digital bank that critics link to former business partners of Peña. Former president Nicanor Duarte Frutos said on 13 October that Peña once held shares in ueno and that Carvallo had been an executive there.
Duarte Frutos called this a conflict of interest. These are political accusations, and no court or regulator has ruled on them.
The BCP has opened an administrative proceeding against ueno, the Asunción broadcaster RDN reported. Leite said the four months set for that process was “a bit much” given the current climate.
The opposition motion asks that any review focus on limits for loans to people and firms linked to a bank. It also asks how the BCP handled warnings from its own technical staff.
What It Means for You
For US investors and companies in Paraguay, the BCP is the regulator that licenses and supervises every bank they use. A credible, independent board is part of why the country is seen as a predictable place to do business.
So far the fight is over how the regulator handled one bank, not over the soundness of the whole system. The risk is a long standoff that erodes trust in supervision as the 2028 campaign heats up.
Watch whether Peña asks for resignations, whether the Senate takes up the Filizzola motion, and what the ueno proceeding finds. Any replacement would again need the Senate’s prior agreement, which adds time.
For the wider picture, see Paraguay Explained: The Country, Its Politics, Its Economy and What to Watch and Paraguay: South America’s Quiet Economic Miracle, Explained. Practical information on the capital is on the Asunción city page.
What Is Not Known
It is not known whether Peña will ask the board to resign or whether the Senate will vote on the removal motion. The central bank report has not been published in full, so its findings cannot be checked independently.
The proceeding against ueno is still open, and no sanction against the bank has been announced. Leite’s account of a meeting between business leaders and Peña has not been confirmed by the presidency.
Frequently Asked Questions
What is the Paraguay central bank board?
It is the five-member body that runs the Banco Central del Paraguay, made up of a president and four directors. They are named by the executive with the Senate’s prior agreement.
Why does Gustavo Leite want the board replaced?
He says the bank’s answers to a Senate inquiry on ueno bank were incomplete and have cost it credibility. He wants President Santiago Peña to appoint neutral, technical officials instead.
Can the Senate fire the central bank’s board?
Not on its own, because the charter law allows removal for poor performance only with the Senate’s prior agreement. The opposition motion therefore asks the executive to start that process.
Who leads Paraguay’s central bank?
Carlos Carvallo Spalding has been president of the BCP since September 2023. By law his term runs alongside that of President Peña, which ends in 2028.
Does this affect US investors?
It could, because the central bank licenses and supervises every bank operating in Paraguay. A long fight over its leadership could weigh on confidence in the country’s financial system.
Sources: Law 489/1995, BCP charter law (Congressional Library) · Law 6104/2018, amending the BCP charter · Banco Central del Paraguay, board members · BCP, Carvallo CV · Radio Monumental, Leite (14 October) · Diario HOY, Leite (14 October) · ABC Color, Leite (14 October) · ABC Color, Filizzola motion · Última Hora, motion text · RDN, lower-house vote · ABC Color, Duarte Frutos · Última Hora, Leite and Cartes · La Nación, Leite career · ABC Color, Carvallo takes office (2023)
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief