New Delhi, Feb. 3 -- Finance and revenue secretary Tuhin Kanta Pandey emphasized on Monday that the Indian rupee remains a free-floating currency and the government is not alarmed by exchange rate fluctuations, which are driven by cross-border capital flows.

This comes as the rupee tumbled to a record low of 87.29 against the US dollar, dropping 67 paise in early trade, following fresh tariffs imposed by US president Donald Trump, sparking fears of a broader trade war.

"Currency volatility is an issue that the RBI (Reserve Bank of India) looks into, but otherwise, it is a free-floating system. See, there will be such episodes where when something is there," Pandey told Mint, referring to external events, adding that capital outflow will...