Emaciated children are flooding war-torn Yemen's hospitals and changes at the country's central bank have some worried the devastating food shortage may worsen.

Key points: Yemen's exiled president is moving the central bank to cut off rebels

Yemen's exiled president is moving the central bank to cut off rebels Traders say it will make importing supplies more difficult

Traders say it will make importing supplies more difficult War-torn Yemen imports 90 per cent of its food

With food ships finding it hard to get into Yemen's ports due to a virtual blockade by the Saudi-led coalition that has backed the government during the country's 18-month civil war, over half the country's 28 million people already do not have enough to eat, according to the United Nations.

Yemen's exiled president, Abd Rabbuh Mansur Hadi, last month ordered the central bank's headquarters to be moved from the capital Sanaa, controlled by Houthi rebels in the north, to the southern port of Aden, which is held by the government.

He also appointed a new governor, a member of his government, who said the bank has no money.

Trade sources involved in importing food to the Arab peninsula's poorest country say this decision will leave them financially exposed and make it harder to bring in supplies.

"The politicisation of the central bank and attempts by the parties in the conflict to use it as a tool to hurt one another ... threaten to push the poorest over the edge," Richard Stanforth, humanitarian policy adviser with Oxfam, said.

"Everything is stacked against the people on the brink of starvation in Yemen."

A nurse checks a boy at a hospital intensive care unit in Sanaa. ( Reuters: Khaled Abdullah )

At the children's emergency unit at the Thawra hospital in the port of Hodaida, tiny patients with skin sagging over their bones writhe in beds.

Hallways and waiting rooms are crowded with parents seeking help for their hungry and dying children.

Salem Issa, 6, rests his stick-thin limbs on a hospital bed as his mother watches over him.

"I have a sick child, I used to feed him biscuits, but he's sick, he won't eat," she said.

A nurse said the ward began taking in around 10 to 20 cases in April, but now struggles with 120 patients per month.

The World Food Program said half of Yemen's children under five are stunted, meaning they are too short for their age because of chronic malnutrition.

United Nations' Humanitarian Affairs chief Stephen O'Brien this week visited Yemen's Al Hudaydah hospital as part of a three-day mission to the country, and said urgent assistance was needed to protect lives.

"Mothers bring their malnourished children for treatment but there is simply not enough medicines to treat them," he said.

"The quantities of food, medicine and fuel entering the country are way below the needs and must be increased as a matter of urgency."

Fears bank changes will hurt ordinary people

In July, importers were already struggling to buy food from abroad because $260 million worth of their funds were frozen in Yemeni banks, while Western banks had cut credit lines.

The decision to move the central bank is viewed as a major blow for suppliers who are mistrustful of the decision and expect even more chaos ahead.

"Western banks are not willing to process payments and the whole system is freezing up. It is an ever growing struggle to do anything commercial," a trade source said.

"Obtaining foreign exchange has to be done through currency smuggling. Yemen is like a country of smugglers now — this is unacceptable."

The UN says half of Yemen's 28 million people do not have enough to eat. ( Reuters: Khaled Abdullah )

The old central bank in the capital Sanaa used Yemen's dwindling foreign exchange reserves to guarantee shipments into a country which imports 90 per cent of its food.

But Mr Hadi disliked the bank paying salaries to his foes in the army and the Iran-aligned Houthi movement opposed to his internationally recognised government, and dismissed the bank's governor, Mohamed Bin Humam.

He named Finance Minister Monasser Al Quaiti in his place and decreed the bank be moved to Aden — Mr Quaiti told Saudi media he had inherited a bank with no money, but pledged to keep it independent.

"The governor Humam enjoyed the confidence of all parties since he was clearly independent and working in the best interests of Yemen," another trade source said.

"To now appoint a minister of finance of the government is a retrograde step and none of the traders have any confidence in him or in the bank in Aden."

Even though moving the central bank seemed to be aimed at hurting the Houthis, Yemeni economic officials and diplomats say the group has its own financial resources, and the bank's closure in Sanaa is likely to hurt ordinary people.

"It risks leaving the salaries of more than a million Yemenis unpaid. There may be a long-term effect on the Houthis, but the immediate effect will be on normal people trying to put food on the table," Yemeni economic analyst Amal Nasser said.

Reuters/ABC