UPDATE 1-Hungary govt party denies report on cen bank governor

* Econ Minister Matolcsy could become cen bank governor -media

* Ruling party spokesman says report false

* PM Orban expected to announce his candidate in early March (Updates with ruling party denial)

BUDAPEST, Feb 6 (Reuters) - Hungary's ruling Fidesz party denied a media report on Tuesday that said Economy Minister Gyorgy Matolcsy could take over at the central bank after outgoing Governor Andras Simor's six-year term expires in March.

National news agency MTI cited Mate Kocsis, a spokesman for Prime Minister Viktor Orban's Fidesz party, as saying a report on the website of business daily Vilaggazdasag citing an unnamed source as saying that a decision had been made was baseless.

"This has not come up even in informal discussions, therefore, we consider the report published by Vilaggazdasag to be baseless and false," MTI cited Kocsis as saying.

Investors are keeping a close eye on the management change at the central bank, which will also involve both of Simor's deputies appointed under a previous government, for clues about policy changes to aid the recession-hit economy.

The Vilaggazdasag report said Mihaly Varga, Orban's minister handling contact with the International Monetary Fund, which led a 20 billion euro bailout of Hungary in 2008, could become economy minister in a government reshuffle after Matolcsy's departure.

The forint, which has been on a roller-coaster in the past weeks in part due to market concerns over the changes at the central bank, fell to 295 versus late on Tuesday after the report was published but recovered to 294 by 2327 GMT.

Orban, who faces an election in just over a year and is under pressure to get the economy growing, has said he would announce his choice for central bank governor in early March. (Reporting by Gergely Szakacs; Editing by Angus MacSwan)