The first task Hungary's new central bank governor faces when he takes office will be to convince international investors he is a man of safety and not surprises.

That could be a tough job for outgoing Economy Minister Gyorgy Matolcsy, set to take up the central bank post on Monday.

The bespectacled 57-year-old economist, a powerful ally of Prime Minister Viktor Orban, has been at the heart of an experimental policy track that has unnerved foreign investors and bodies such as the International Monetary Fund.

A politician to the core with a ready smile, he has often defended his go-it-alone style in strong words, attacking "speculators" who bet against the forint and rating agencies who have cut Eastern Europe's most-indebted nation to "junk".

A day before his nomination, Matolcsy accused banks and multinationals of attacking his government with "all possible means" to undermine policies that hurt big interest groups.

His ministry called for Standard & Poor's "to downgrade itself" after the agency's latest negative move on Hungary.

Such bon mots - including a reference to debt being devoured like the scones at a town hall meeting where he was speaking - have made Matolcsy a part of Hungarian folklore.

But it remains to be seen whether a lively figure who can work any audience will be able to temper his words in a job where investors focus on such subtleties as a slight change in language or an omission of a past reference.

Matolcsy summed up his achievements as a "fairy tale" last year, saying his policies would bear fruit in 2013. Given the steep slide in the debt-laden economy last year, that increasingly looks like a tall order.

"Demand for long-term loans is depressed, projecting a trend of continuing fall in investments and casting a shadow on long-term growth prospects," said Robert Huszar, corporate banking division head of K&H, one of the biggest local banks.

With just over a year left before an election, unemployment remains high, households are deeply indebted, and the foreign banks who dominate the Hungarian market continue to withdraw funds instead of lending.

Market participants take it for granted that Matolcsy will seek new ways to stimulate the recession-bound economy on top of a rate cut cycle the bank launched in August.

The question is whether he can proceed with caution or launch measures that investors deem risky to the forint.

"He is very strong, has carried out most things (government plans) and has lots of ideas," one central bank source said. "He is like a new graduate who has a huge amount of ideas, of which one or two are excellent and the rest is unorthodox."

SHOCKS OR NOT

Whether it was Matolcsy's advice or premier Orban's vision that has driven the European Union's most unconventional economic policy mix is under debate.

Either way, Matolcsy took serious risks with Hungary's international reputation with big business, renationalising private pension assets and financing personal income tax cuts at the expense of banks and multinationals.

That policy mix made Hungary one of the few European Union members who could cut their budget deficit to below the bloc's ceiling, 3 percent of economic output, last year.

But unpredictability and a willingness to flirt with danger are not common attributes for central bankers seeking to keep things on an even keel.

The appointment of such a leading figure from the government to the bank only raises more questions over its independence - one of the issues that has put Budapest most at odds with Brussels in the past two years.

But it is not clear that investors are overly concerned on that front, given that figures appointed by Orban's parliamentary majority already dominate interest rate policy. Rather the concern is that the drive to support growth may lead Matolcsy to take risks which will push Hungary - long one of central and eastern Europe's most volatile sovereign borrowers - into trouble.

"Clearly the doubts over the next central bank head and monetary policy caused the forint jitters since January," said David Nemeth, analyst of ING Bank in Budapest.

Matolcsy is aware of the stakes.

When market players made an attempt late last month to throw the forint over a key psychological fence at 300 to the euro, Matolcsy rushed to reassure investors that "there should be no shock therapy from monetary policy, no surprises."

And he said in late January that the central bank "will be absolutely independent in the future", and will respect its inflation target, while adding that the bank could use focused liquidity injections to encourage bank lending to companies.

(Additional reporting by Gergely Szakacs, Editing by Jeremy Gaunt)