USD is the most widely accepted foreign currency and easiest to exchange on the island. Bring enough cash in USD to pay for your trip.
For small personal purchases such as souvenirs, you can convert USD into Yemeni Rial in the city Hadiboh. The best rates are had on the black market so ask your guide to trade money for you. The black market rate tends to fluctuate between 400 and 700 YER to $1 USD while the bank rate is only 250 YER. Yemen’s currency is currently unstable. You can easily pay for purchases with small denominations of USD. $1 notes are best (think drinks and snacks from shops and small souvenirs).