when a government or central bank engages in seigniorage by creating new money it increases the money supply if this increase in the money supply outpaces the growth of goods and services in the economy it can lead to inflation this is based on the quantity theory of money which suggests that an increase in money supply all else being equal will lead to a proportional increase in the price level 
the inflationary impact of seigniorage largely depends on how the newly created money is used if the government uses seigniorage to finance productive investments that increase the economy s productive capacity it may not lead to significant inflation on the other hand if seigniorage is used to finance current consumption or unproductive expenditures it s more likely to be inflationary keep in mind that central banks typically aim to control inflation through various monetary policy tools they may offset the potential inflationary effects of seigniorage through other mechanisms such as adjusting interest rates or conducting open market operations therefore while excessive seigniorage can contribute to inflation the central banks that can very closely monitor the impact of seigniorage and adapt their policies accordingly 