Reports have linked Morata with a loan move to the Gunners during the January transfer market.
The 21-year-old has made just one start in La Liga for Real Madrid this season.
“I say, some clubs are interested but the subject is closed,” Ancelotti told Spanish radio station Esradio.
“Morata remains with us because we need a footballer like him at Real Madrid this season.
“Although he has not played many matches this season I have confidence in his work for the team.”
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Being an amiable guy is good for you and Jurgen Klopp is living proof.
Summer 2016 is set to be a very exciting time for football fans, as this is when the long awaited Euro 2016 tournament kicks off.