Balogun has been heavily linked with a move away from the Gunners as his contract expires at the end of the season.
A number of sides are keen to sign the 19-year-old forward on a free, with Brentford and Southampton tracking him.
Arteta, however, wants Balogun to stay and is giving him more minutes in the first-team as a result.
The forward has taken his chance, scoring his first senior goal by finding the net against Molde on Thursday, and Arteta believes he wants to stay in north London.
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“Well deserved for the boy. He’s working really hard,” said Arteta, when asked about Balogun’s goal in the 3-0 win.
“He had some difficult months with all the speculation around him, he’s handled the situation in a really mature way.
“He wants to stay, we want him to stay. We gave him the opportunity and he took it straight away.”
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