SYDNEY (Reuters) - Australia's central bank held interest rates steady on Tuesday as expected, while reiterating that policy needed to stay tight and it was not ruling out further increases if needed to control inflation.

Wrapping up its September policy meeting, the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35% and said policy would have to be sufficiently restrictive to ensure inflation returned to target.

Markets had wagered heavily on a steady outcome as policy makers have repeatedly stated a cut is unlikely this year given sticky core inflation. [AU/INT]

(Reporting by Wayne Cole; Editing by Shri Navaratnam)