Such policies would gradually undermine the value of the rand and lead to an eventual collapse of the financial system, with serious adverse implications also for the level of real economic activity.
Provided appropriate collateral is taken and appropriate haircuts are in place, it can do this without incurring material credit risk. In so doing, the central bank can provide society with an efficient and low-cost form of insurance against a liquidity crisis in the banking system. Indeed, it is a longstanding role of central banking to do exactly this.