By Alexander Marrow
(Reuters) -The rouble rebounded after slumping to a more than 18-month low against the dollar on Monday in a volatile session, still hampered by reduced foreign currency supply but eventually latching on to higher oil prices to gain ground.
Events in the Middle East were hurting risk appetite. The Israeli military called up 300,000 reservists, two days after Hamas fighters killed hundreds of Israelis and seized dozens of hostages in a raid that shattered Israel's reputation of invincibility.
By 1500 GMT, the rouble was 0.7% stronger against the dollar at 99.75 , recovering from hitting 102.3450 earlier, its weakest point since March 23, 2022. The Russian currency tumbled to a record low 121.5275 in the weeks after Moscow's February 2022 invasion of Ukraine.
The rouble had gained 0.5% to trade at 105.24 versus the euro and firmed 0.6% against the yuan to 13.64 .
The rouble's last tumble into triple digits in August led the Bank of Russia to make an emergency 350 basis-point rate hike to 12% and authorities to discuss reintroducing controls to buttress the currency, but interventions - verbal or otherwise - have been more limited this time around.
Rates were lifted to 13% in September and analysts polled by Reuters expect the central bank to hike again on Oct. 27, with persistent rouble weakness among the factors limiting Russia's long-term growth prospects.
Brent crude oil, a global benchmark for Russia's main export, was up 3.9% at $87.85 a barrel, lifted by the military conflict in the Middle East.
Russia's finance ministry expects tax revenues from energy companies to rise in October.
"If these forecasts come true, then oil companies will have to sharply increase the volume of sales of FX revenues for settlements with the budget," said Alor Broker's Alexei Antonov.
He said exporters were unlikely to limit FX sales until the end of the month, when taxes are due, meaning that the rouble could start recovering this week.
Russian stock indexes were higher, led by oil companies.
The dollar-denominated RTS index was up 1.4% to 1,001.3 points. The rouble-based MOEX Russian index was 0.9% higher at 3,172.2 points, earlier reaching a near one-month high.