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Punakha Dzong, "palace of great happiness" was built in 1637 by Shabdrung Ngawang Namgyal after Simtokha Dzong and is located strategically between the confluence of Pho Chu and Mo Chu Rivers. The Dzong, which was damaged by four catastrophic fires and an earthquake, has been fully restored by the present King. Punakha served as the capital of the country until second king who moved the capital to Bumthang as summer and Trongsa as the winter. It was here on 17th December 1907, Bhutan's first king, Sir Ugyen Wangchuk was crowned as the first hereditary ruler of Bhutan. It is also the venue for Punakha Festival held in February or March.

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