Bank AG is betting the Nigerian naira will strengthen against the US dollar as it adds the West African nation to its frontier foreign exchange monitor, a tool it uses to watch currencies in smaller, less liquid markets.

Strategists and economists at the Frankfurt-based lender see the naira “undervalued” and offering attractive carry alongside favorable real rates, it said in a client note on Monday. “The principal risk to the outlook is from the fiscal side,” it said, pointing to the debt management office’s bond issuance calendar for this quarter which signals “elevated issuance levels.”The naira is among the world’s best-performing currencies this year, with its nearly 8% appreciation against the dollar ranking it in the top 10 of 144 currencies tracked by Bloomberg. The currency’s gains also anchor investor returns across Nigerian assets, from stocks to local-currency bonds, which rank among the highest in the world.

While the German lender expects fiscal spending to rise ahead of Nigeria’s January polls, it expects “less risk from the elections themselves.”The Deutsche Bank FX monitor also track other African currencies including Angola’s kwanza and Ghana’s cedi. The nations’ economies have all had a solid year despite the fallout from the conflict in the Middle East, according to the lender. Elevated crude prices for Nigeria and Angola and firmer gold prices for Ghana helped strengthen their current-account positions, it said.

The countries are also benefiting from strong economic conditions — specifically high real interest rates and ample foreign exchange reserves — which have supported high “investor inflows,” the strategists and economists at the lender wrote in the client note. The naira was trading at 1,332 per dollar on Monday.