How do excessive foreign reserves cause inflation? I have studied that accumulation of foreign reserve has the potential to raise inflation levels in economy as the money base increases (= domestic currency + foreign reserve increases) and if it overshoots the money demand in the economy then it will raise price levels. 
My question here is that how the foreign reserves which are under the custody of the central bank go into the system and cause inflation. Say, China has huge reserves of USD but it rests with the central bank mostly. So, how does it get into the economy and raise prices ?
Because you are taking other currencies off the market and/or selling your own currency, and increasing the supply of your own currency relative to others.