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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.

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And I'm Melissa Block. Iran has been on a buying spree lately for gold. The U.S. Treasury is investigating reports that couriers have been buying billions of dollars' worth of gold in Turkey and carrying it into Iran. And recently, the Iranian Central Bank announced it was imposing strict controls on the export of gold. As NPR's Mike Shuster reports, these are symptoms of a larger Iranian problem: Its economy is in freefall.

MIKE SHUSTER, BYLINE: Iran is stockpiling gold. That's the way David Cohen sees it. He's undersecretary of the Treasury and the Treasury's point man for the banking sanctions the U.S. has imposed on Iran.

DAVID COHEN: Iran is attempting to hoard gold, both by acquiring it and by preventing the export of gold from Iran, in a somewhat desperate attempt to try and defend the value of its currency.

SHUSTER: Despite an oil embargo and U.S. banking sanctions, Iran is still selling some oil, although a reduced amount, to neighboring Turkey. Turkey is paying Iran in Turkish lira, not the kind of strong currency Iran needs right now, notes Muhammad Sahimi who writes for the website Tehran Bureau.

MUHAMMAD SAHIM: Turkish lira cannot really be converted to dollar or euro in international market. And in addition because of Iran, sanctions on Iranian bank, any such transaction is difficult. So what Iran does is that when it receives local currency, it buys gold or silver in the same market using the local currency that it has received and then transfers them to Iran.

SHUSTER: Iranians have reportedly bought about $2 billion worth of gold a month since July, when tough U.S. banking sanctions went into effect along with a European boycott of Iranian oil. It is not known who the Iranian buyers are nor where the gold is going in Iran. It is sold in the form of bullion and is apparently being hand-carried in suitcases by air to Dubai and then most likely by boat across the Persian Gulf to Iran. Two billion dollars' worth of gold weighs more than 30 tons. This suggests a large number of carriers and trips to move that much gold into Iran each month. It's not an activity the U.S. looks upon favorably, says David Cohen.

COHEN: The sale of gold to the government of Iran whether by Turkey or by any other country or citizen of any other country is subject to sanctions under our law.

SHUSTER: At the same time, the Central Bank of Iran is blocking gold from leaving Iran. What this adds up to is an effort to accumulate gold for use in now-sanctioned international transactions. Iran has tried other ways to strengthen its currency. Currency traders were arrested recently and accused of undermining the rial. Then a curious wrinkle to this story emerged in government newspapers and websites: The allegation that a single currency trader named Jamshid Besmillah was responsible for the collapse of the rial. Muhammad Sahimi says this story is pure fiction.

SAHIM: If there is such a guy, which I doubt, that is probably his nickname, not his true name. I have never heard of him before.

SHUSTER: His last name, Besmillah, means in the name of God. Nader Hashemi, an Iran analyst at the University of Denver, believes this and the arrest of currency traders are symptoms of a deepening crisis.

NADER HASHEMI: So these are all, I think, signs of desperation by the regime, concocting a story that one individual is allegedly responsible for the collapse of the Iranian rial. It does seem, you know, quite bizarre, but I think it just points to the reality of how the Iranian regime now is in deep crisis.

SHUSTER: Treasury Undersecretary Cohen agrees Iran's economy is in crisis. As for Iran's new found interest in the gold trade, Cohen says the U.S. will take action.

COHEN: You can be certain that we are looking carefully at this issue, and where we see an individual or an entity that may be involved in activity that violates our sanctions, we investigate that very aggressively.

SHUSTER: The combined effect of banking sanctions and reduction of Iran's oil revenues has been powerful, Cohen says. It seems doubtful that gold purchases and the arrest of currency traders - real or fictional - will help Iran evade the sanctions. Mike Shuster, NPR News.

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