Paraguay's President Luis Gonzalez Macchi has declared a state of emergency for five days, giving the police special powers to control the outbreak of street violence. About 15 people were injured in violence that broke out in several cities on Monday.
The presidential decree gives Paraguayan security forces extra powers to quell any outbreaks of public violence this week.
On Monday, several thousand protesters took to the streets on the southern outskirts of the capital Asuncion and in other cities, leading to violence and clashes with police. Angry mobs also set up roadblocks on highways leading to Brazil and Argentina. Paraguayan analyst Edwin Britez says economic problems in Paraguay are among the leading causes of the outbreak of violence.
"This is happening as the economic situation in Paraguay is bad," he said. "There is also general discontent with President Macchi. It is also believed General Lino Oviedo, who is in exile in Brazil because he is wanted here, and the opposition Liberal Party organized these protests to destabilize the government."
Mr. Oviedo, a former military commander, is wanted in Paraguay on charges linked to the assassination of the country's vice-president in 1999. He has also been sentenced to 10 years in jail for a failed coup attempt in 1996.
The opposition Liberal Party expressed support for the demonstrators, saying the country's economic situation is dismal. However, a group speaking for Mr. Oviedo denied his involvement.
Brazil's Supreme Court has rejected Paraguay's request for his extradition, saying it is politically motivated.