BUENOS AIRES, Aug 16 Reuters Confidence in Argentina39;s peso plumbed new depths on Wednesday as the currency slid to 780 pesos per dollar in the popular black market, where savers are willing to pay more than twice the official rate now pegged at 350 pesos per greenback.

The longstruggling peso, held in check by capital controls for years, plunged this week after a shock primary election result raised the possibility of a radical libertarian economist winning the presidential election in October. Households have rushed to convert their pesos to dollars as a more stable way to protect their savings.

On Monday, the central bank devalued the official exchange rate some 18 and hiked the benchmark interest rate to 118 to protect the peso and tamp down inflation, already running at more than 113 and squeezing people39;s savings and wages.

Demand for dollars continues to be sustained as people look to hedge and are increasingly concerned about an acceleration of inflation after the devaluation, said economist Gustavo Ber, citing a climate of political and economic uncertainty.

The Sunday primary vote saw outsider candidate Javier Milei, who has pledged to dollarize the economy and eventually scrap the central bank, win the largest share of the vote. He will face a threeway battle in an Oct. 22 general election.

As the peso has slid, the government has tried to stabilize the local currency, reducing access to some parallel foreign exchange markets, cracking down on…