The Royals have been strongly linked with a move for the Russia international, who has fallen out of favour, but their manager doubts that any move will take place
The Russian international has barely featured for the Gunners this season, and Arsene Wenger is said to be keen to remove the high-earner from the wage bill.
The Royals were rumoured to be preparing a £4 million bid to team the mercurial forward up with fellow countryman Pavel Pogrebnyak, who he played with during his time at Zenit St Petersburg.
However, McDermott distanced himself from such speculation, telling Sky Sports News: "It's one that I've heard many times.
"He's an Arsenal player. I don't think he will be a Reading player."
However, the Reading boss is insistent there are funds available in order to bolster the team's fight against relegation, with owner Anton Zingarevich prepared to dip into his pocket should the right player be identified.
"We haven't broken the bank, I certainly haven't in the last three years and we probably haven't in the last 12 years as a club," McDermott explained.
"That's not to say that if a player came in that we felt was right for us, at the right cost, then the owner would have to make a decision to back that deal. Then we will wait and see.
"It's not a case of we wouldn't if it was right."