Mbappe, 18, has burst onto the scene this season, scoring 23 goals in all competitions, and his performances both domestically and in the Champions League have put Europe’s top sides on red alert.
Wenger revealed last month that the Gunners had an offer turned down for Mbappe last summer but it appears the 67-year-old remains interested in the Frenchman.
‘Of course [we’re following him]. It would be hypocritical and a lie to say we’re not following him,’ Wenger said in an interview with SFR Sport.
However, Wenger conceded that Arsenal may have already fallen behind the likes of Chelsea of Manchester United in the battle to land the teenager.
He added: ‘But he’s perhaps already in the category of clubs who perhaps have more financial potential than us.’
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It’s understood Real Madrid are also closely monitoring Monaco’s talisman ahead of the summer transfer window.