The market does not differentiate between bank deposits and other forms of money such as cash. They trade at parity; there is no credit premium. It is for this reason that there is no preference in holding particular forms of money so an increase in one type will have a similar outcome to increasing cash.
If more bank deposits are issued, this will have the same impact on behaviour as adding an extra quantity of cash to the system. When a commodity is in greater supply, the price will fall and hence extra bank deposits cause inflation.
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