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In rebel Syria, some welcome sanctions but fear for economy

IDLIB, Syria (Reuters) - In the last bastion of the rebellion against President Bashar al-Assad, Syrians who fled his rule see new U.S. sanctions as a step in the right direction but say they must be shielded from any fallout as the currency crumbles.

The toughest U.S. sanctions yet against Damascus came into effect on Wednesday under the Caesar Act, named after a Syrian military photographer who smuggled thousands of photos out of Syria showing mass killings, torture and other crimes.

"It's a good decision. But what's important is that we don't get affected by it," said Baker al-Ali, 30, in the opposition-held Idlib region of the northwest.

"Today all the prices are irrationally high."

Already battered by nearly a decade of war, the Syrian pound has collapsed in the last month, with dealers citing the impending sanctions as one of the factors driving demand for hard currency, along with a financial collapse in neighbouring Lebanon.

While the northwest corner falls outside Assad's rule, the Syrian pound is still used there. This month the pound has sunk to 3,000 to the dollar from 47 in 2011, when the conflict began.

The U.N. agency OCHA says the halving of its value since May has pushed the price of basic goods to record highs and further out of reach of the four million people in the northwest, where many Syrians fled as Assad recovered territory from rebels.

PRICE RISES

Syria has already been under U.S. and European Union sanctions but the new sanctions are more sweeping.

They exempt imports of essential food and humanitarian items but increase scrutiny of aid to ensure it does not benefit Assad's government.

"The economic situation here cannot bear yet another rise in prices. The (sanctions) should keep civilians out of harm's way," said Yusef Ghraibi, 24.

In government-held areas, too, the currency's collapse is biting hard.

"The prices of shoes increased 10,000 (pounds) from yesterday to today," said Abdulrahman Jlelati in Aleppo.

The U.N. special envoy to Syria warned this week of a "dramatic collapse in economic conditions throughout the country".

Western states want to see progress towards a political transition in Syria before they will help to rebuild the country.

Damascus says the new sanctions breach all international norms and are part of an economic war.

Assad, in a 2015 interview, dismissed the Caesar photos as "allegations without evidence", and part of a Qatar-funded plot against his government.

(Reporting by Khalil Ashawi in Azaz, Syria,; Additional reporting by Stephanie Ulmer-Nebehay in Geneva and Eric Knecht in Beirut; Editing by Ellen Francis, Tom Perry and Gareth Jones)