Germany was forced to pay restitution for WWI and it had to pay them in gold or currencies it didn't create or control. The exchange rate forced extreme austerity on the people of Germany and creating money to compensate for that inflation was the only choice available that allowed them to purchase mostly imported goods until its currency was rejected entirely by importers.

War always drives extreme inflation for the loser because it loses a lot of its productive capacity as well. Governments do use currencies to enable them to provision themselves without having actual productive capacity of their own. They use their taxing authority to drive the need for their currency in the private sector and to deploy resources into the private sector where they are available to government.