town, eastern Paraguay. It is situated on the right bank of the Paraná River at the Brazil–Paraguay border. Salto del Guairá is the site of one of the earliest colonial settlements in Paraguay, Ciudad Real, which was established in 1556 by Rui Díaz de Melgarejo. The original settlement was abandoned in the 17th century. The modern town is linked by bridge to the Brazilian port city of Guaíra and is a centre of international trade. The local economy is based on the cultivation of Yerba maté (Paraguayan tea) and the exploitation of hardwoods used by the construction industry. Employment opportunities at the nearby Itaipú dam project (Paraguay–Brazil) attracted many new residents after 1977. Pop. (2002) urban area, 6,653.