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The river's source lies just south of Diamantino , in the Brazilian province of Mato Grosso, where it is known as the Paraguai. It then flows south through Cáceres, the Pantanal wetland, and the city of Corumbá . Briefly marking the Brazil- Bolivia border, it then divides Brazil (on the east bank) and Paraguay (on the west bank). As a major communication route in Paraguay, it links towns such as Bahía Negro , Fuerte Olimpo , Puerto Guarani , Puerto Sastre , Puerto Casado and Puerto Pinasco before dividing the country into the western Gran Chaco desert and mostly forested east.
Further south, Concepción and Asunción lie on the river, before it forms the border between Paraguay and Argentina, in which FormosaFormosa is the capital city of Formosa Department, Formosa Province, Argentina. It is traditionally inhabited by Tobas and Matacos Indians. Created in April 1879, by the Comandante Luis Jorge Fontana, Formosa had been the capital of the Territorio Naciona lies. It then joins the Paraná just north of CorrientesCorrientes city in northeastern Argentina, capital of Corrientes Province, a port on the Parana River, near its junction with the Paraguay River. The city is situated in a fertile agricultural region with good transportation facilities by river and by rai.