The 19-year-old has entered the final four months of his contract at Emirates Stadium and is yet to pen fresh terms.
It has led to speculation the forward will leave for free in the summer, with clubs all over Europe chasing his signature.
Arteta, however, insists Arsenal have not given up on keeping Balogun.
“I think I am pretty positive about it and every time I spoke to him, he mentions the same thing, that he’s determined to stay here and he wants to stay here,” said Arteta.
“He has some really positive conversations with his agent as well and [Arsenal technical director] Edu is in charge of that.
“He’s been spending a lot of time and energy to make that deal happen because it’s important for us to keep our talent in the house, and what we can guarantee is that we’re doing everything we can to keep him.”