Why Twist?The idea is that by purchasing longer-term bonds, the RBI can help drive the bond prices up and yields down (since prices and yields move in opposite directions).
At the same time, selling shorter-term bonds should cause their yields to go up (since their prices would fall). In combination, these two actions twist the shape of the yield curve.Operation Twist is designed to induce downward pressure on longer-term interest rates by lowering long-term Treasury yields.
The central bank buys long-term notes with the proceeds from short-term bills. This increases demand for Treasury notes. Just like any other assets, as demand rises, so does the price.