Yes, new coins are created when staking (some 2.5% per year). These new coins created as a reward for staking are actually a built-in inflation.
you can call it inflation, interest whatever you want.. its still a small incentive for people to hoard coins. thankfully not as big as other PoS coins. and obviously not big enough because mintpal still had more than 30% of the entire supply.
It is incentive to secure the network
wow its people really like arguing semantics today...
you get paid to hold the coins in one place instead of spending them.. this leads to centralization. it doesn't matter what you call it... the effect is the same... people are encouraged to put the coins in one place so they can get even more coins... if the coins are in one place they can be stolen more easily...
how much more explaining do you need?
a coin that pays out 2.5% PA is obviously not going to encouraging hoarding as much as one that pays out 10% per year (like some other PoS coins) . and obviously some people thought they could get more money trading the coins on mint pal hence why so many coins where held on there. but any kind of reward for holding will encourage some amount of centralization.