South Korea's market for short-term financial instruments has grown in recent years, backed by policy efforts to nurture the market as well as increasing demand for new investment vehicles, a report showed Wednesday.

The value of the local money market reached 338.9 trillion won($313.2 billion) as of the end of last year, increasing by 71.4 trillion won from the end of 2010, according to the report by the Bank of Korea. From the end of 2013, the market expanded by 15.9 trillion won.

With the increase, the portion of the money market, which accounted for 10.2 percent of the overall financial market here in 2010, slightly rose to 10.8 percent last year.

The money market refers to where financial instruments with a maturity of less than one year, including commercial papers and monetary stabilization bonds, are traded.

The expansion was backed by government efforts to foster the short-term money market as well as growing demand for various investment vehicles in tandem with the country's economic growth, the report said.

Since 2010, Seoul has released a series of measures aimed at expanding the money market such as propping up real-time transaction and information systems.

The report, however, noted that the country's money market is still relatively small in comparison with its nominal gross domestic product.

It accounted for 22.8 percent of the country's nominal GDP as of 2014, lagging behind 47.5 percent in the United States and 70.8 percent in Japan. The U.S. and Japan figures are based on 2013 and 2012 data.