"I re-emphasise that the global economy is in recovery. It not a strong recovery by any means...recovery is weak but not anywhere that looks like depression (of 1930s)," he said when asked about his views on the world economy and its challenges.
Referring to his last week's speech, the Governor said predicting 'great depression' kind of situation by media was an unwarranted extrapolation of the content of the speech made at London Business School.
"I gave the same speech four times before and somehow the word that came out... The first report on it was reasonable summary, even though it was close door nobody was supposed to report it, it was reasonable summary of what I said.
"Then there was summary of the summary and then there was summary of the summary of the summary. In this game of Chinese whisper at the end of it I was predicting great depression again," he said after the Reserve Bank board meeting in Chennai.
Dr Rajan said monetary policy across the world, especially the unconventional monetary policies of different kinds, is getting to the point that it may have the primary effect on currency, rather than having its impact on energising interest rate sensitive sectors of a country.
"If that is the effect, in the net form it starts resembling some of the comparative devaluation sort of the policies that we had in 30s which I worried about. If a large currency area depreciates vis-a-vis India then our exports find it more difficult because rupee then becomes overvalued," he said, explaining the complexities of the present global situation.
There is a pressure on all countries including on India, he added.
"Commentators (are saying) why are you letting the rupee become strong...we should not succumb to these policies focusing of only on exchange rate which then becomes detrimental because everybody cannot depreciate against everybody else that was the context in which I made the statement," he said.
He also said that the Indian currency is fairly valued.
"I will not say the rupee is overvalued. I think it's fairly valued," he said.
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