PARAGUAY · MARKETS
Key Facts
- What happened The dollar rose about 12% in a week to about 6,360 guaraníes, Paraguay’s currency, on Thursday 5 November.
- Risk gauge JPMorgan’s index of extra interest on Paraguay’s dollar debt rose from 119 to 144 points.
- Trigger Paraguay’s central bank shut Ueno Bank, which held 9% of the country’s deposits, on Tuesday 3 November.
- Rating view Moody’s, a credit rating firm, calls the damage negative but manageable if the resolution is quick.
- Savers About 97% of depositors are fully covered by a state fund; wider payouts are expected in 15 days.
- Power Index Paraguay ranks 10th of 14 in The Rio Times Latin America Power Index, with 35.0 points (November 2026 edition).
The Paraguay dollar rate jumped about 12% in a week, reaching about 6,360 guaraníes per US$1 on Thursday 5 November 2026. The shock followed the closure of Ueno Bank, a digital lender with almost three million customers.
A key gauge of country risk rose from 119 to 144 points, and President Santiago Peña announced his resignation the same day, though Congress had not yet accepted it. For US investors, it is a stress test for a small soy-and-beef exporter that sells bonds in dollars abroad.
Why the Paraguay Dollar Jumped
Paraguay’s central bank, the Banco Central del Paraguay, ordered Ueno Bank into resolution on Tuesday 3 November 2026. It said the bank’s solvency index, a measure of capital against risk, stood below half the legal minimum.
Ueno held 9% of all deposits and 8% of all loans in the country as of September 2026. The shock reached the currency market within days, with the guaraní weakening against the dollar.
By Thursday one US$1 cost about 6,360 guaraníes, up from 5,661 on 28 October, and the dollar gained 5.4% on Thursday alone.
How the Risk Gauge Moved
JPMorgan’s emerging-market index measures the extra interest investors demand to hold a country’s dollar bonds instead of US Treasuries. For Paraguay it rose from 119 to 144 basis points, or 1.44 percentage points, a gain of 21%.
The Asunción stock exchange suspended all trading in Ueno’s debt securities, which entered default status. Ueno had sold US$350 million of dollar bonds to international investors earlier this year.
The Paraguayan Industrial Union, a business lobby, warned of a partial freeze in commercial payment chains. That warning shows the stress is spreading from savers to companies.
What Moody’s and the Safety Net Say
Moody’s said some uninsured depositors, including companies, could face delays or losses in getting their money back. It expects only a modest and temporary hit to the real economy if the bank is wound up quickly and in order.
The central bank says about 97% of depositors are fully covered by the Deposit Guarantee Fund, a state-backed savings insurer. Cover reaches 228 million guaraníes (about US$35,900) per person or company.
The central bank promised a first payment of up to 10 million guaraníes (about US$1,570) soon, and expects wider payouts in about 15 days.
How the Crisis Unfolded
Ueno’s troubles built for weeks, as we reported on Thursday 29 October in our story on its capital plan. The central bank chief Carlos Carvallo resigned under pressure over his earlier ties to the bank, as our report on the bank closure shows.
Peña’s announcement came on Thursday 5 November, and our resignation report has the details. Before the crisis, a strong guaraní had hurt farm sellers, as we explained in our currency story.
In Plain English, Who Is Who
Santiago Peña is Paraguay’s conservative president, in office since 15 August 2023. Pedro Alliana, the vice president, is the constitutional successor if the resignation takes effect.
The Banco Central del Paraguay supervises banks and is running the resolution of Ueno. The Deposit Guarantee Fund pays insured savers, and Moody’s rates the strength of the country’s banks.
What It Means for You
US investors in emerging-market bond funds share part of the risk that JPMorgan’s index measures. A higher reading means Paraguay pays more to borrow in dollars.
Paraguay is a major exporter of soy and beef, so US food buyers watch its currency and payment chains. A weaker guaraní makes its exports cheaper in dollars, but a payment freeze can slow trade.
Visitors paying in dollars now get more guaraníes per US$1. Ueno’s cards and app are switched off, so travelers should carry another way to pay.
What Is Not Known
It is not yet clear how much Ueno’s uninsured depositors and bondholders will recover. The central bank has not said how long the resolution will take.
It is also unclear when Congress will settle Peña’s resignation and the impeachment case. The dollar and risk readings could move again as that is decided.
More: Latin America news in English, every day from The Rio Times.
Frequently Asked Questions
Why did the Paraguay dollar rate jump?
The central bank closed Ueno Bank on 3 November, and confidence in the financial system dropped. The dollar then rose about 12% in a week to about 6,360 guaraníes.
What is the Paraguay country risk reading?
It is JPMorgan’s measure of the extra interest investors demand on a country’s dollar bonds. For Paraguay it rose from 119 to 144 basis points.
Are savers at Ueno Bank protected?
The central bank says about 97% of depositors are fully covered by the Deposit Guarantee Fund. Balances above 228 million guaraníes are not covered and recovery is uncertain.
Does this affect US investors?
Funds holding Paraguayan or emerging-market dollar bonds may see price swings as risk rises. Ueno’s own US$350 million of bonds are in default status.
Sources: Banco Central del Paraguay, resolution notice on Ueno Bank, 3 November 2026; Moody’s Ratings, sector comment on Ueno Bank resolution, 4 November 2026; JPMorgan emerging-market bond index, Paraguay spread, 5 November 2026; Bolsa de Valores y Productos de Asunción, suspension of Ueno debt trading, November 2026; Unión Industrial Paraguaya, statement on payment chains, November 2026.
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