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The city stands on the eastern bank of the Paraguay River , almost at the confluence of this river with the Pilcomayo River. The rest of the city is surrounded by the Central Department. Administratively, the city forms an autonomous capital district, not a part of any department. It is the headquarters of the three state powers Executive, Legislative and Judicial , the Cultural Center of the Republic and the different agencies and entities of the State.
It used to be the main river port of the country, a function that Villeta occupies today. From the capital, the main state resolutions and projects are issued; and the banking, economic, cultural, diplomatic, social, union and industrial entities of the country are centralized.
Most of the main routes to the main cities of the country begin here. It is the headquarters of the Permanent Review Court of Mercosur. It is located in a strategic area for Mercosur , in the center-north of the Southern Cone. It is located about 1, km mi from the Pacific Ocean and about 1, km mi from the Atlantic Ocean, being relatively equidistant between both oceans, a factor that promotes economic growth and leads it to become a kind of hub in the region. The Spanish conquistador Juan de Ayolas died c.
On his way up and then down the river, de Salazar stopped briefly at a bay in the left bank to resupply his ships. He found the natives friendly, and decided to found a fort there in August Thus the city became the center of a large Spanish colonial province comprising part of Brazil, present-day Paraguay and northeastern Argentina.